SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 14, 2011
Delaware 000-6658 04-2217279
_______________ ____________ __________________
(State or other (Commission (IRS Employer No.)
jurisdiction of File Number)
incorporation)
|
ITEM 1.01
See Item 2.01 for information as to an Asset Purchase Agreement and a
Research and Development Agreement, both dated November 14, 2011.
ITEM 2.01 Completion of Acquisition or Disposition of Assets
On November 14, 2011, Scientific Bioprocessing, Inc. ("SBI") a recently organized wholly-owned subsidiary of the Company, acquired substantially all of the assets of Fluorometrix Corporation, (the "Assignor") related to the design, development and production of bioprocessing methods, systems and products . The acquired assets consist primarily of a license under certain patents held by the University of Maryland Baltimore County ("UMBC") and sublicenses thereunder granted by Assignor to others including the Company, and know-how. The Company's sublicense is limited to research, design, development and production of incubator systems for vessels, including bags, of 250 milliliter to five liter volumes.
Pursuant to the Asset Purchase Agreement (the "APA") between Assignor and SBI and the Company the consideration paid and payable by the Company consists of $260,000 in cash, of which $100,000 is being held in escrow to secure the Assignor's representations and warranties, 135,135 shares of the Company's Common Stock valued at $400,000 based on the average of the per share closing bid and asked prices of the Common Stock on the Over-the-Counter Market Bulletin Board for the three business days immediately prior to the closing, a $230,000, 3.25% promissory note of the Company payable to UMBC in 36 equal monthly installments of $6,714.05 each, and the obligation to pay Assignor 30% of the net fees, mainly royalties, received by SBI under the acquired license and sublicenses.
Pursuant to the APA, SBI entered into a Research and Development Agreement (the "R&D Agreement") for Assignor to provide research and development services with respect to bioprocessing projects designated by SBI quarterly along with scheduled completion dates subject to the consent of Assignor which may not be unreasonably withheld. The R&D Agreement is for a term expiring November 14, 2013, with SBI having three renewal options of one year each. SBI is to pay the developer a monthly fee of $14,000 subject to a cash penalty or right to terminate in the event of uncured failures to meet development targets.
The Assignor and its affiliates, including Dr. Joseph Qualitz, its President, have agreed to non-competition covenants pursuant to the APA and the R&D Agreements.
SBI intends to conduct the related operations at the facility of the Company's subsidiary Altamira Instruments, Inc., in Pittsburgh, Pennsylvania.
As a result of the stock issuance, the Company's outstanding shares of Common Stock increased to 1,331,712 as of November 14, 2011.
Assignor's revenues, derived principally from fees paid by its sublicensees under the patent, for its fiscal years ended September 30, 2011 and September 30, 2010 amounted to $230,000 and $176,000 respectively, of which the Company under its sublicense did not pay any amounts for both periods.
No assurance can be given that the related patent will be successfully maintained, or that it will provide meaningful protection with respect to the related business and development or otherwise.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
Fluorometrix Corporation was unable to provide audited historical financial statements for its fiscal years ended September 30, 2010 and September 30, 2011 to the Company or the information which would enable the Company without material expense to have them prepared.
(b) Pro Forma Financial Information
The Company intends to file pro forma financial information under cover of Form 8-K/A no later than 71 calendar days after the date this Report was required to be filed.
(c) Exhibits Exhibit No. Exhibit __________ _________________________ |
2.1 Copy of Asset Purchase Agreement dated as of November 14, 2011 among the Company, Scientific Bioprocessing Inc. and Fluorometrix Corporation.*
10(a) Copy of Escrow Agreement
10(b) Copy of Research and Development Agreement, dated November
14, 2011 between Scientific Bioprocessing Inc. and Fluorometrix
Corporation
10(c) Copy of $230,000 Promissory Note payable to University of
Maryland Baltimore County
10(d) Copy of Non-Competition Agreement with Dr. Joseph Qualitz
10(e) Copy of License Agreement between University of Maryland
Baltimore County and Fluorometrix Corporation to be filed by
amendment.
10(f) Copy of Sublicense between Fluorometrix Corporation and the
Company (filed on June 14, 2006 as Exhibit 10(a)(1) to the Company's
Report on Form 8-K, and incorporated herein by reference thereto)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SCIENTIFIC INDUSTRIES, INC.
(Registrant)
Date: November 17, 2011 By: /s/ Helena R. Santos ________________________ Helena R. Santos, President and Chief Executive Officer |
ESCROW AGREEMENT, dated as of November 14, 2011 (this "Agreement"), is made by and among SCIENTIFIC INDUSTRIES, INC., a Delaware corporation ("SI"), SCIENTIFIC BIOPROCESSING, INC., a Delaware corporation ("SBI" collectively, along with SI, the "Company"), FLUOROMETRIX CORPORATION, a Massachusetts corporation "Fluorometrix") and REITLER KAILAS & ROSENBLATT LLC, as escrow agent (the "Escrow Agent").
RECITALS
The Company and Fluorometrix are parties to that certain Asset Purchase Agreement, dated as of the date hereof (the "Purchase Agreement") providing for the acquisition by the Company and sale by Fluorometrix of the assets of Fluorometrix described in the Purchase Agreement. The Purchase Agreement provides that One Hundred Thousand Dollars ($100,000) (the "Escrowed Funds") and 89,786 shares of the Company's Common Stock registered in the name of Fluorometrix (the "Escrowed Shares") of the acquisition consideration is to be deposited with the Escrow Agent to be held and disbursed pursuant to the terms of the Purchase Agreement and this Agreement.
Capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement.
NOW THEREFORE, it is agreed as follows:
1. Appointment of Escrow Agent. The Company and Fluorometrix hereby appoint the Escrow Agent, and the Escrow Agent hereby agrees to serve, as escrow agent in accordance with, and pursuant to, this Agreement.
2. Delivery of Escrowed Funds. At the Closing, SI pursuant to the terms of the Purchase Agreement will deliver to the Escrow Agent the Escrowed Funds by wire transfer to the account designated by the Escrow Agent (the "Escrow Account"), to be held pursuant to the terms of this Agreement until disbursed as provided in Sections 3 and 4 below. The Escrow Agent shall notify SI and Fluorometrix of the Escrow Account number upon opening the account. The Escrowed Funds shall be deposited into an interest-bearing sub-escrow account with First Republic Bank (or such other bank at which the Escrow Agent maintains its primary banking relationship).
3. Disbursement of Escrowed Funds.
(a) No later than ten (10) Business days following the receipt
of a written notice from the Company to the Escrow Agent and
Fluorometrix that indemnification is payable to SI pursuant to Section
9 of the Purchase Agreement in the amount set forth in such notice
from the Escrowed Funds, the Escrow Agent shall disburse to SI from
the Escrowed Funds the amount of indemnification, unless within ten
(10) Business days of confirmed delivery of such notice, Fluorometrix
shall provide both Escrow Agent and the Company written advice that it
disputes the notice provided by the Company including the amount of
indemnification sought therein. No disbursement by the Escrow Agent
of that portion of the undelivered Escrowed Funds of the
amount in dispute shall be made by the Escrow Agent until five (5) Business Days following receipt by the Escrow Agent and Fluorometrix of written advice from the Company that the dispute has been resolved and the details of such resolution. In such event, the Escrow Agent shall disburse the amount in accordance with the advice unless written advice is received by the Escrow Agent from Fluorometrix within such five (5) Business day period, with a copy delivered to the Company that the dispute has not been resolved stating the amount which remains in dispute. In such event, the Escrow Agent shall disburse from the Escrowed Funds the amount, if any that is not in dispute; provided, however, the amount or amounts to be disbursed shall not in the aggregate exceed the balance of the Escrowed Funds plus interest accrued but unpaid on the balance in the Escrowed Account.
(b) (i) If on a date six months following the Closing Date the amount distributed by the Escrow Agent from the Escrow Funds plus the amount of outstanding claims for indemnification made against Fluorometrix to the Escrow Agent by the Company pursuant to the Purchase Agreement is less than $50,000 in sum, the Escrow Agent shall disburse from the Escrowed Funds to Fluorometrix the amount which represents the balance of such $50,000 such that there remains in the Escrow Account following such distribution $50,000.
(ii) If on a date 12 months following the Closing Date there remains a balance of Escrowed Funds as to which the Escrow Agent has not received written notice of any outstanding claim for indemnification made against Fluorometrix by the Company pursuant to the Purchase Agreement, the Escrow Agent shall disburse such balance of the Escrowed Funds to Fluorometrix.
(c) The distribution of all the Escrowed Funds shall not foreclose the prosecution by the Company against Fluorometrix of a claim or claims for indemnification pursuant to Section 9.2 of the Purchase Agreement.
(d) To the extent there remain Escrowed Funds which have not been disbursed as a result of a dispute between the Company and Fluorometrix, the Company and Fluorometrix shall use their reasonable best efforts to resolve such dispute by negotiation and the Escrow Agent shall disburse such balance in accordance with Section 9(b)(viii) of this Agreement.
4. Escrowed Funds Interest. All disbursements from the Escrowed Account shall include income accrued in the Escrowed Account on the amount being disbursed before such income accrual.
5. Disbursement by Wire Transfer. All disbursements made hereunder shall be made promptly by wire transfer of immediately available funds. The Company and Fluorometrix shall provide the Escrow Agent with their respective wire instructions.
6. Tax Ownership. The Parties agree that (i) SBI shall be treated for tax purposes as the owner of funds held in the Escrow Account, (ii) any interest and other amounts earned thereon or with respect thereto, if any ("Taxable Income") until a distribution by the Escrow Agent shall be reported as taxable income or gain of SBI, and (iii) SBI shall take into account, be responsible for and pay when due all taxes attributable to Taxable Income. The Company shall deliver such certificates and other documents as the Escrow Agent or its bank may reasonably request in connection with the foregoing, including, without limitation, a complete, executed IRS Form W-9. Notwithstanding
anything to the contrary in the foregoing, if and from the date any of the Escrowed Funds are distributed to Fluorometrix, for the account of Fluorometrix, pursuant to Section 3(b) then Fluorometrix shall be deemed to be the beneficial owner of those Escrowed Funds, but the Company shall be deemed the owner of any interest and of any Taxable Income from any after the date of such distribution; the Parties hereto understand that the failure to provide properly completed applicable withholding tax forms may cause the Escrow Agent or its bank to become obligated to withhold a portion of the Taxable Income and pay over such amounts from the Escrow Account or its bank pursuant to applicable provisions of tax law.
7. Delivery of Escrowed Shares. As soon as practicable but no later than three (3) business days following the Closing Date, SI pursuant to the terms of the Purchase Agreement shall deliver to the Escrow Agent the Escrowed Shares to be held pursuant to the terms of this Agreement and the Purchase Agreement. The Escrowed Shares shall be delivered to Fluorometrix as follows: one-half of the Escrowed Shares on a date 12 months following the Closing Date and the balance of the Escrowed Shares on a date 24 months following the Closing Date. During the Escrow Period, Fluorometrix shall be entitled to receive dividends paid by the Company with respect to the Escrowed Shares. Fluorometrix shall not assign any of the Escrowed Shares or any interest thereon during the period such Escrowed Shares are held. During such period the stock certificates for the Escrowed Shares shall bear in addition to the legend set forth in Section 4.15 of the Purchase Agreement, the following legend which shall be deleted upon delivery of the Escrowed Shares pursuant to this Agreement.
"THE SHARES EVIDENCED BY THIS CERTIFICATE
ARE SUBJECT TO THE TERMS OF AN ESCROW
AGREEMENT, DATED NOVEMBER 14, 2011 AND
SUCH SHARES OR ANY INTEREST THEREIN MAY NOT BE ASSIGNED DURING THE RELATED ESCROW PERIOD."
8. Voting of Escrowed Shares. During the period SI agrees to provide to Fluorometrix with respect to the Escrowed Shares copies of all materials provided to the stockholders of SI with respect to the voting of such shares and copies of written communication delivered to stockholders pursuant to SI's certificate of Incorporation, By-Laws and the Rules and Regulations under the Securities Exchange Act of 1934, as amended.
9. Escrow Agent.
(a) The Escrow Agent shall receive no fee for its services hereunder. The Escrow Agent shall be entitled to reimbursement, within 15 days of presentation of appropriate documented invoices, from the Company, of the Escrow Agent's reasonable expenses incurred to third parties in the performance of its duties hereunder; provided, however, the Escrow Agent shall not be entitled to reimbursement for fees incurred in connection with the negotiation and preparation of this Agreement or in connection with acting as Escrow Agent. The Escrow Agent is hereby granted a lien on the Escrowed Funds for such amounts.
(b) To induce the Escrow Agent to act hereunder, it is further agreed that:
(i) The Escrow Agent shall not be under any duty to give the Escrowed Funds held by it hereunder any greater degree of care than it gives its own similar property.
(ii) This Agreement expressly sets forth all the duties of the Escrow Agent with respect to any and all matters pertinent hereto. No implied duties or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent shall not be bound by the provisions of any agreement among the other parties hereto (including the Purchase Agreement), except this Agreement.
(iii) The Escrow Agent shall not be liable, except for its own gross negligence or willful misconduct, and, except with respect to claims based upon such gross negligence or willful misconduct that are successfully asserted against the Escrow Agent, the other parties hereto shall jointly and severally indemnify and hold harmless the Escrow Agent (and any successor Escrow Agent) from and against any a nd all losses, liabilities, claims, actions, damages, and expenses, including reasonable attorneys' fees and disbursements, arising out of, and in connection with, this Agreement. In no event shall the Escrow Agent be liable for consequential, indirect or punitive damages. This paragraph shall survive termination of this Agreement.
(iv) The Escrow Agent shall be entitled to rely upon any order, judgment, certification, demand, notice, instrument, or other writing delivered to it hereunder without being required to determine the authenticity or the correctness of any fact stated therein or the propriety or validity of the service thereof. The Escrow Agent may act in reliance upon any instrument or signature believed by it in good faith to be genuine and may assume, if in good faith, that any person purporting to give notice or receipt or advice or make any statement or execute any document in connection with the provisions hereof has been duly authorized to do so. The Escrow Agent shall not be liable for any action taken or omitted in good faith and in accordance with such advice.
(v) The Escrow Agent does not have any interest in the Escrowed Funds or Escrowed Shares deposited hereunder (except as provided in Section 9(a)), but is serving as escrow holder only. Any payments of income, if any, from the Escrow Account shall be subject to withholding regulations then in force with respect to United States taxes.
(vi) The Escrow Agent (and any successor escrow agent) at any time may be discharged from its duties and obligations hereunder by the delivery to it of notice of termination signed by the Company and Fluorometrix or at any time may resign by giving written notice to such effect to the Company and Fluorometrix. Upon any such termination or resignation, the Escrow Agent shall deliver the Escrowed Funds to any successor escrow agent jointly designated by the other parties hereto in writing, or to any court of competent jurisdiction if no such successor escrow agent is agreed upon, whereupon the Escrow Agent shall be discharged of and from any and all further obligations arising in connection with this Agreement. The termination or resignation of the Escrow Agent shall take effect on the earlier of (A) the appointment of a successor (including a court of competent jurisdiction) or (B) the twentieth day after the date of delivery: (1) to the Escrow Agent of the other parties' notice of termination or (2) to the other parties hereto of the Escrow Agent's written notice of resignation. If at that time the Escrow
Agent has not received a designation of a successor escrow agent, the Escrow Agent's sole responsibility after that time shall be to keep the Escrowed Funds safe until receipt of a designation of successor escrow agent or a joint written disposition instruction by the other parties hereto or an enforceable order of a court of competent jurisdiction.
(vii) The Escrow Agent shall have no responsibility for the contents of any writing of any third party contemplated herein as a means to resolve disputes and may rely without any liability upon the contents thereof.
(viii) In the event of any dispute among or between the other parties hereto resulting in adverse claims or demands being made in connection with the Escrowed Funds or in the event that the Escrow Agent in good faith is in doubt as to what action it should take hereunder, the Escrow Agent shall retain the Escrowed Funds and Escrowed Shares until the Escrow Agent shall have received (A) a final and non-appealable order of a court of competent jurisdiction directing delivery of the Escrowed Funds and Escrowed Shares or (B) a written agreement executed by the other parties hereto directing delivery of the Escrowed Funds and Escrowed Shares, in which event the Escrow Agent shall release and distribute the Escrowed Funds and Escrowed Shares in accordance with such order or agreement. The Escrow Agent shall act on such court order without further question.
(ix) The parties hereto irrevocably (A) submit to the jurisdiction of any state or federal court sitting in New York County, New York in any action or proceeding arising out of, or relating to, this Agreement, (B) agree that all claims with respect to such action or proceeding shall be heard and determined in such state or federal court, and (C) waive, to the fullest extent possible, the defense of an inconvenient forum. The parties hereby consent to and grant any such court jurisdiction over the persons of such parties and over the subject matter of any such dispute and agree that delivery or mailing of process or other papers in connection with any such action or proceeding in the manner provided hereinabove, or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.
(x) No publicly distributed material or other matter in any language which mentions the Escrow Agent's name or the rights, powers, or duties of the Escrow Agent shall be issued by the other parties hereto or on such parties' behalf unless the Escrow Agent shall first have given its specific written consent thereto.
(xi) Distribution of the Escrowed Funds and Escrowed Shares pursuant to this Agreement by the Escrow Agent shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of any party to this Agreement in and to the Escrowed Funds and the Escrow, and shall be a perpetual bar both at law and in equity as against the Escrow Agent, the Company and Fluorometrix. The Escrow Agent's responsibilities and liabilities hereunder will terminate upon transfer by Escrow Agent of all the Escrowed Funds and Escrowed Shares under this Agreement.
10. Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be (a) delivered by hand, (b) facsimile, or (c) overnight delivery with proper postage prepaid, and addressed as follows:
(i) If to the Company:
Scientific Industries, Inc.
Scientific Acquisition Corp
70 Orville Drive.
Bohemia, New York, New York 11716
Attention: Helena R. Santos, Chief Executive Officer
Facsimile Number: (631) 567-5896
With a copy to:
Reitler Kailas & Rosenblatt LLC
885 Third Avenue, 20th Floor
New York, New York 10022
Attention: Leo Silverstein, Esq.
Facsimile Number: (212) 371-5500
(ii) If to Fluorometrix:
Fluorometrix Corporation
24 Timber Road
Stow, Massachusetts
Attention: Joseph E. Qualitz, President
(iii) If to the Escrow Agent:
Reitler Kailas & Rosenblatt LLC
885 Third Avenue, 20th Floor
New York, New York 10022
Attention: John Watkins, Esq.
Facsimile Number: (212) 371-5500
or to such other address as the person to whom notice is to be given may have previously furnished to the others in the above-referenced manner. Except as otherwise provided herein, no notice or communication shall be effective until received.
9. Miscellaneous.
(a) Conflict. Reitler Kailas & Rosenblatt LLC is counsel to Company in this transaction and has in the past been counsel to the Company and certain of its affiliates. Both Company and Fluorometrix consent to the additional appointment of Reitler Kailas & Rosenblatt LLC as Escrow Agent for this transaction. Both the Company and Fluorometrix acknowledge that, in acting as Escrow Agent, Reitler Kailas & Rosenblatt LLC is not acting as attorneys for Fluorometrix. Fluorometrix consents to Reitler Kailas & Rosenblatt LLC continued and future representation of the Company and its affiliates and agree not to assert any such conflict of interest
or to seek to disqualify the firm or its partners from representing the Company or an affiliate of the Company notwithstanding any dispute that may develop between Fluorometrix and the Company other than a dispute between the Company and Fluorometrix as to the Escrow Agreement or enforcement of its terms.
(b) Binding Effect. This Agreement shall be binding upon, and inure solely to the benefit of, the parties hereto and their respective successors and assigns, heirs and administrators and shall not be enforceable by, or inure to the benefit of, any other third party, except as provided in paragraph (vi) of Section 9(b) with respect to the termination of, or resignation by, the Escrow Agent. No party may assign any of its rights or obligations under this Agreement without the written consent of the other parties.
(c) Choice of Law. This Agreement shall be construed in accordance with, and governed by, the internal law of the State of New York (without reference to its rules as to conflicts of law).
(d) Modification. This Agreement may only be modified by a writing signed by the Company, the Escrow Agent and Fluorometrix.
(e) Headings. The section headings herein are for convenience only and shall not affect the construction thereof. Unless otherwise indicated, references to Sections and Articles are to Sections and Articles, respectively, contained herein.
(f) Counterparts; Facsimile. This Agreement may be executed in one or more counterparts (each of which may be transmitted via facsimile) but all such separate counterparts shall constitute but one and the same instrument; provided that, although executed in counterparts, the executed signature pages of each such counterpart may be affixed to a single copy of this Agreement which shall constitute an original.
(g) Conflicting Language. In the event of a conflict between Company and Fluorometrix relating to the language of this Agreement and the language of the Purchase Agreement, as between the Company and Fluorometrix, the language of the Purchase Agreement shall control between them.
(h) Termination. The escrow created pursuant to this Escrow Agreement shall terminate at the time that the full amount of the Escrowed Funds and the interest thereon have been disbursed in accordance herewith, and all obligations of Fluorometrix and Company to the Escrow Agent shall have been satisfied.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
SCIENTIFIC INDUSTRIES, INC.
SCIENTIFIC BIOPROCESSING, INC.
By:/s/ Helena R. Santos _____________________________ Name: Helena R. Santos Title: President |
SELLER:
FLUOROMETRIX CORPORATION
By: /s/ Joseph Qualitz _________________________ Name: Dr. Joseph Qualitz Title: President |
ESCROW AGENT:
REITLER KAILAS & ROSENBLATT LLC
By: /s/ John Watkins ________________________________ Name: John Watkins Title: Partner |
ASSET PURCHASE AGREEMENT
DATED AS OF
NOVEMBER 14, 2011
BETWEEN
SCIENTIFIC INDUSTRIES, INC.
SCIENTIFIC BIOPROCESSING, INC.
AND
FLUOROMETRIX CORPORATION
TABLE OF CONTENTS
1. DEFINITIONS. 3 1.1. DEFINITIONS 3 1.2. OTHER DEFINED TERMS 9 2. PURCHASE OF THE ACQUIRED ASSETS. 10 2.1. PURCHASE AND SALE 10 2.2. ASSUMPTION OF LIABILITIES 11 2.3. EXCLUDED ASSETS 11 2.4. EXCLUDED LIABILITIES 11 3. PURCHASE PRICE AND CLOSING. 11 3.1. PURCHASE PRICE 11 3.2. CLOSING 12 3.3. INSTRUMENTS OF TRANSFER 12 3.4. PURCHASE PRICE ALLOCATION 12 4. REPRESENTATIONS AND WARRANTIES OF ASSIGNOR 13 4.1. DUE ORGANIZATION; QUALIFIED; NO SUBSIDIARIES. 13 4.2. AUTHORIZATION 13 4.3. NO CONFLICTS OR VIOLATION. 13 4.4. CONTRACTS AND COMMITMENTS 13 4.5. MATERIAL CONTRACTS; NO DEFAULT; ASSUMED CONTRACTS AND COMMITMENTS; NO DEFAULT. 14 4.6. TITLE TO AND SUFFICIENCY OF THE ACQUIRED ASSETS 15 4.7. MATTERS RELATING TO THE ACQUIRED ASSETS. 15 4.8. LITIGATION; OTHER CLAIMS 15 4.9. LICENSES AND PERMITS; REGULATORY FILINGS; LEGAL COMPLIANCE. 15 4.10. CONDUCT OF BUSINESS IN COMPLIANCE WITH REGULATORY REQUIREMENTS; WARRANTIES. 16 4.11. SUBJECT IP. 16 4.12. FINANCIAL STATEMENTS 18 4.13. ENVIRONMENTAL MATTERS 19 4.14. ABSENCE OF CERTAIN LIABILITIES 19 4.15. INVESTMENT REPRESENTATIONS 19 4.16. BROKERAGE 19 4.17. DISCLOSURE 20 5. REPRESENTATIONS AND WARRANTIES OF ASSIGNEE AND SI 20 5.1. DUE ORGANIZATION 20 5.2. AUTHORIZATION; BINDING OBLIGATIONS 20 5.3. NO DEFAULT OR VIOLATION 20 5.4. SECURITIES FILINGS 20 5.5. BROKERAGE 21 5.6. VALID ISSUANCE OF SHARES 21 6. CONDITIONS PRECEDENT TO CLOSING 21 6.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS UNDER THIS AGREEMENT 21 6.2. CONDITIONS TO OBLIGATIONS OF ASSIGNEE AND SI 22 6.3. CONDITIONS TO OBLIGATIONS OF ASSIGNOR 23 7. POST-CLOSING MATTERS 24 7.1. COVENANT OF FURTHER ASSURANCES 24 7.2. PAYMENT OF TAXES 24 7.3. DEFENSE OF CLAIMS AND LITIGATION 25 7.4. RETENTION OF RECORDS 25 7.5. SHARING OF DATA 25 7.6. CONFIDENTIALITY. 25 8. NON-COMPETITION COVENANT. 26 9. INDEMNIFICATION PROVISIONS 26 9.1. INDEMNIFICATION. 26 9.2. INDEMNIFICATION PROCEDURE. 27 9.3. SURVIVAL OF REPRESENTATION AND WARRANTIES 29 10. MISCELLANEOUS. 29 10.1. WAIVERS AND AMENDMENTS. 29 10.2. PERFORMANCE 29 10.3. NOTICES 29 10.4. EXPENSES 30 10.5. PUBLICITY 30 10.6. ENTIRE AGREEMENT 31 10.7. GOVERNING LAW. 31 10.8. INTERPRETATION 31 10.9. MODIFICATION 31 10.10. SEVERABILITY 32 10.11. DISCLOSURE SCHEDULE AND EXHIBITS 32 10.12. COUNTERPARTS AND FACSIMILE SIGNATURES 32 10.13. NO ASSIGNMENT BY ASSIGNOR 32 10.14. WAIVER OF JURY TRIAL 33 List of Exhibits and Disclosure Schedule Exhibit A - Escrow Agreement Exhibit B - Form of Promissory Note Exhibit C - R&D Agreement Exhibit D - Form of Non-Competition Agreement Exhibit E - Form of Legal Opinion of Cooley LLP Disclosure Schedule |
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made this 14th day of November, 2011 by and among SCIENTIFIC INDUSTRIES, INC., a Delaware Corporation ("SI"), its wholly owned subsidiary, SCIENTIFIC BIOPROCESSING, INC., a Delaware corporation ("Assignee") and FLUOROMETRIX CORPORATION, a Massachusetts corporation ("Assignor").
WHEREAS, Assignor owns and desires to sell and assign to Assignee and Assignee desires to acquire from Assignor all of the assets of Assignor related to Bioprocessing (as hereinafter defined) including licenses and sublicenses with respect to patents owned by the University of Maryland Baltimore County ("UMBC"); and
NOW THEREFORE, in consideration of the foregoing and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:
1. Definitions.
1.1. Definitions. In addition to the terms defined elsewhere in this Agreement, including the recitals, the following terms, when used herein, shall have the following meanings:
(a)"Acquired Assets" shall have the meaning set forth in
Section 2.1 below.
(b) "Acquisition" shall mean the purchase of the Acquired Assets and the other transactions contemplated by this Agreement and the other Related Documents.
(c) "Affiliate" shall mean a person that directly or
indirectly, through one or more intermediaries, controls or is controlled
by, or is under common control with, the person specified. For purposes
of this definition, the terms "control," "controlled by" and "under
common control with" shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of
such person and, in the case of an entity, shall require (i) in the case of
a corporate entity, direct or indirect ownership of at least a majority of
the securities having the right to vote for the election of directors, and
(ii) in the case of a non-corporate entity, direct or indirect ownership of
at least a majority of the equity interests with the power to direct the
management and policies of such non-corporate entity.
(d) "Agreement," "this Agreement," "hereto," "hereof," "hereunder," "hereby," and similar expressions refer to this Agreement as a whole, including the schedules, appendices and exhibits attached hereto, and not any particular article, section, subsection or other subdivision hereof or thereof.
(e) "Assignor-Related Claims" shall mean claims arising out of or connected or substantially related to (i) the ownership or the Exploitation of any Acquired Asset by or on behalf of Assignor or any Assignor Affiliate on or before the Closing Date or (ii) the operation of any business by or on behalf of Assignor or any Assignor Affiliate at any time with respect to the Acquired Assets.
(f) "Assumed Contracts" shall mean the contracts listed in
Section 1.1(f) of the Disclosure Schedule.
(g) "Bioprocessing" shall mean all products, systems and methods employing the bioprocessing technology which was or is to be employed or applied in whole or in part and the related Trade Secrets by or on behalf of Assignor under or with respect to the Patent Rights.
(h) "Bioprocessing Business" shall mean the research, development, production, marketing and sale of Bioprocessing products, systems, methods and processes with respect to the then or contemplated business of SI or the Assignee including Bioprocessing.
(i) "Code" shall mean the United States Internal Revenue Code of 1986, as amended.
(j) "Computer Code" shall mean hardware, firmware, and software, regardless of form (e.g., embedded logic, object code or source code) or language, where such hardware, firmware, and software performs logic or other operations or includes instructions, such that when executed, the instructions cause a computer or other data processing system to carry out logic or other operations.
(k) "Confidential Information" shall mean all ideas and information of any kind that are held in confidence by one person and transferred, disclosed or made available to a receiving person and are identified at the time of disclosure as being proprietary or confidential. The obligations in this Agreement with respect to Confidential Information shall not apply to any portion of the Confidential Information that the receiving person can demonstrate by legally sufficient evidence (i) now or hereafter, through no act or failure to act on the part of the receiving person, is or becomes public; (ii) is known to the receiving person or one of its Affiliates at the time such person receives such Confidential Information except as a result of the person?s employment or affiliation with Assignor; (iii) is hereafter furnished to the receiving person by a third person unrelated to the disclosing person without violating any agreement with the disclosing person; or (iv) is independently developed by the receiving person or one of its Affiliates without use of any Confidential Information received from the other person.
(l) "Copyrights" shall mean all original works of authorship, including all copyrights and registrations or applications for registration of copyrights in any jurisdiction, including any renewals or extensions thereof, advertising materials, publications, technical papers and Computer Code, instructional brochures, and any right (whether by license or otherwise) to use any of the foregoing, that are owned, used or held for use by Assignor in connection with any Acquired Asset.
(m) "Disclosure of Invention" shall mean any written, oral or visual idea, concept or invention of Assignor, any Assignor Affiliate or any person from whom Assignor or any Assignor Affiliate has obtained intellectual property rights in any manner relating to an Acquired Asset, whether or not such idea, concept or invention has been filed as a patent application or submitted by the inventor(s) to any attorney, agent or other representative of Assignor or any Assignor Affiliate for evaluation as to patentability.
(n) "Disclosure Schedule" shall mean the lists and other information delivered by Assignor to Assignee in response to the requirements of Section 4.
(o) "Environmental Law" shall mean any Law relating to:
(i) the protection or restoration of the environment, health, safety,
or natural resources, (ii) the handling, use, presence, disposal,
release or threatened release of any Hazardous Substance, or (iii)
wetlands, indoor air, pollution, contamination or any injury or threat
of injury to persons or property in connection with any Hazardous
Substance.
(p) "Exploit" or "Exploitation" shall mean, with respect to any product, invention, system, process, intellectual property or asset, to disclose, manufacture, produce, import, use, operate, research, design, develop, perform clinical or other testing, perform quality assurance testing, commercialize, revise, repair, register, maintain, modify, enhance, upgrade, prepare derivative works, seek regulatory concurrences or approvals, package, label, improve, formulate, export, transport, distribute, promote, market, advertise, sell, have sold, offer for sale or license such product, invention, intellectual property or asset, or to have another person do any of the same.
(q) "Governmental Authority" shall mean any nation, territory or government, foreign, domestic or multinational, any state, local or other political subdivision thereof, and any bureau, court, tribunal, board, commission, department, agency or other entity exercising executive, legislative, judicial, regulatory or administrative functions of government, including all taxing authorities and all U.S. and European bodies and all other entities exercising regulatory authority over Acquired Assets or devices.
(r) "Hazardous Substance" shall mean any substance that is
(i) listed, classified or regulated pursuant to any Environmental Law,
(ii) any petroleum product or by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyls, radioactive
materials or radon, or (iii) any other substance which is the subject of
regulatory action by any Governmental Authority in connection with any
Environmental Law.
(s) "Initial Specifications" shall mean any and all patterns, plans, designs, research data, techniques, methods, formulae, specifications, Manufacturing Processes, vendor, raw material and component lists and specifications, quality testing procedures, process validations, environmental control documentation, design history files, operating manuals, blueprints, sketches, drawings, manuals, data, records, procedures, research and development records, compositions, improvements, proposals, technical and computer data and Computer Code and related documentation, process descriptions and other technical data (including chemical formulations, design specifications, standard operating procedures and manufacturing protocols) reasonably necessary for or used or held for use by or on behalf of Assignor or any Assignor Affiliate in connection with the Exploitation of any Acquired Asset, and all copies and tangible embodiments of the foregoing.
(t) "Insider" shall mean any stockholder, director or officer of Assignor or any Assignor Affiliate.
(u) "Intellectual Property" means all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, trademarks, trade names, corporate names, goodwill associated therewith, and applications, registrations, and renewals in connection therewith, copyrights and applications, registrations, and renewals in connection therewith, websites, mask works and applications, registrations, and renewals in connection therewith, trade secrets and confidential business information including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, computer software (including data and related documentation), other proprietary rights that are used or are necessary to the conduct of the Bioprocessing Business by Assignor.
(v) "Knowledge" shall mean the knowledge, after due inquiry, of the officers (including the Chief Executive Officer, Chief Financial Officer and any person holding an office of vice president (or comparable office of authority) or above) and directors of Assignor and the technical employees of Assignor?s business related to the Acquired Assets.
(w) The term "Law" shall mean any federal, state, local, municipal, international, multinational, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, order, edict, decree, rule, regulation, guideline, ruling requirement or other pronouncement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
(x) The term "license" shall include not only rights granted under formal or informal license agreements including the Subject License, but also other rights to use (including rights granted by means of covenants not to sue).
(y) "Lien" shall mean any interest, consensual or otherwise, in property, whether real, personal or mixed, or assets, tangible or intangible, securing an obligation owed to, or a claim by a third person, or otherwise evidencing an interest of a person other than the owner of the property or asset, whether such interest is based on Law or contract, and including any security interest, security title, lien, mortgage, recordation of abstract of judgment, deed of trust, deed to secure debt, encumbrance, restriction, charge, covenant, legal or equitable claim, exception, encroachment, easement, right of way, license, permit, pledge, conditional sale, option, trust (constructive or otherwise) or trust receipt or a lease, consignment or bailment for security purposes or other title exception affecting any property or asset.
(z) "Litigation Matter" shall mean any claim, investigation, arbitration, grievance, litigation, action, suit or proceeding, administrative or judicial, to which a Party is (or, to such Party's knowledge, is threatened to be made) a party, or relating to any Acquired Asset, or this Agreement (in each case whether such Party is a plaintiff, defendant or otherwise), at law or in equity or otherwise, or before any Governmental Authority.
(aa) "Manufacturing Processes" shall mean all processes related to the production of the Acquired Assets, including: (i) flow charts and process descriptions of each and every process step for the manufacture of the Acquired Assets; (ii) molding parameters such as temperature, flow rate and pressure for all molds and molded components in the Acquired Assets; and (iii) full and complete specifications on all equipment used specifically for the Acquired Assets, such as molds, gluing stations, fixtures, jigs and test equipment including software and Computer Code.
(bb) "Material Adverse Effect" shall mean any change, effect or circumstance that (i) is materially adverse to any Acquired Asset, (ii) materially impairs the ability of any Party to consummate the transactions contemplated by, or to perform its obligations under, this Agreement or any other Related Document, or otherwise materially impedes the consummation of the Acquisition or (iii) has a material adverse effect on the financial value of any Acquired Asset to Assignee or on the ability of Assignee to Exploit any Acquired Asset after the Closing.
(cc) "Net Fees and Royalties? shall mean the fees and royalties paid to or on account of Assignee after deducting the fees and royalties paid or to be paid by Assignee or its assignee to the licensor or sublicensor under the license and sublicense agreements pursuant to which the fees and royalties were received.
(dd) "Net Infringement Fees" shall mean payments made or credits awarded to Assignee or its assignee by a sublicensee under the Subject Sublicenses which are part of the Acquired Assets for alleged infringement of the related patent net of amounts paid or credited or to be paid or credited to any sublicensee pursuant to the terms of the relevant Subject Sublicense.
(ee) "Parties" shall mean Assignor, Assignee and SI, each of which is sometimes referred to as a "Party."
(ff) "Patent Rights" shall mean the United States and foreign patents and patent applications listed in Section 1.1(ff) of the Disclosure Schedule.
(gg) The term "person" shall mean an individual, corporation, partnership, limited partnership, limited liability company, unincorporated association, trust, joint venture, union or other organization or entity, including a Governmental Authority.
(hh) "Records" shall mean and include all of the following to the extent that they relate to any Acquired Asset (in each case, whether such materials are evidenced in writing, electronically, or otherwise): all business records (including regulatory compliance records); all Regulatory Correspondence (together with all supporting and background documentation); submissions and reports to any notified body or competent authority and all other records and materials necessary to comply with requirements of third party auditors; all data and information relating to any testing of Acquired Assets; risk management records; documents, correspondence, studies, reports, and all other books, ledgers, files, and records of every kind; tangible data; any vendor, supplier or service provider lists (including a description of the underlying commercial arrangements with such vendors, suppliers or service providers that may omit the financial terms); promotional literature and advertising materials with support data; catalogs; research material; technical information, blueprints, technology, technical designs, drawings, specifications and other product development records used or held for use by or on behalf of Assignor or any Assignor Affiliate.
(ii) "Regulatory Correspondence" shall mean any and all of the following: all applications, registrations, approvals, concurrences, and filings with, and other submissions and
correspondence relating to any Acquired Asset, including to or from a United States or foreign patent office, any state counterpart, and any other Governmental Authority (in each case together with all supporting and background documentation).
(jj) "Related Documents" shall mean (i) each of this Agreement, the R&D Agreement, the Escrow Agreement and the instruments of transfer contemplated by Section 3.3 and (ii) each other document to which Assignor or any of the Assignor Affiliates or Assignee or SI or any of its Affiliates is a party that is delivered in connection with the transactions contemplated by this Agreement.
(kk) "Subject IP" shall mean all rights in any and all
of the following throughout the world: (i) Subject Patent Rights,
(ii) Copyrights, (iii) Trademarks, (iv) Trade Secrets and (v) rights to
sue, recover and retain damages for past, present and future infringement,
misappropriation, dilution, or other violation of any of the foregoing.
(ll) "Subject License" shall mean the Exclusive License Agreement, effective January 31, 2001 between UMBC and Assignor with respect to the Subject Patent Rights as to the Patent Rights and Amendments thereto dated as of April 27, 2001, May 4, 2004, December 31, 2005 and as of May 1, 2008.
(mm) "Subject Patent Rights" shall mean all Patent Rights that are licensed to or otherwise available to Assignor or any Assignor Affiliate and used or held for use by Assignor or any Assignor Affiliate in connection with any Acquired Asset or the Exploitation of any Acquired Asset.
(nn) "Subject Sublicenses" shall mean the sublicenses granted by Assignor under the Subject License including, without limitation, those set forth in Section 1.1(nn) of the Disclosure Schedule.
(oo) "Tax" or "Taxes" shall mean any federal, state, local, or foreign income, single business, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including Taxes under Code Section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, including any interest, penalty, or addition thereto, whether disputed or not and including any obligation to indemnify or otherwise assume or succeed to the Tax liability of any other person.
(pp) "Tax Return" shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
(qq) "Trademarks" shall mean all trademarks, service marks, trade dress, logos, slogans, trade names, corporate names, and Internet domain names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, that are owned, used or held for use by Assignor in connection with any Acquired Asset, including the Registered Trademarks set forth in Section 1.1(q)(q) of the Disclosure Schedule.
(rr) "Trade Secret" shall mean all data and information owned by, used by or held for use by or on behalf of or licensed to (or otherwise available to) Assignor or any Assignor Affiliate and maintained in confidence by Assignor or any Assignor Affiliate, that in any way relates to any Acquired Asset or the Exploitation of any Acquired Asset, including all related processes, plans, designs, research, operating manuals, methods, compounds, formulae, discoveries, developments, designs, drawings, technology, techniques, procedures, know-how, specifications, inventions, customer and supplier lists (including a description of the underlying commercial arrangements with such customers and suppliers that may omit the financial terms), and other scientific or technical data or information conceived, memorialized, developed or reduced to practice, in each case whether or not patentable in any jurisdiction. Until such time as any particular patent has been published in accordance with the terms of a patent application or such patent application has been published, the term "Trade Secret" shall be deemed to include all inventions disclosed in such patent application.
1.2. Other Defined Terms. Definitions of the defined terms listed below are contained in the Section set forth opposite the defined term in the table below:
Defined Term Section of Agreement
Acquired Assets Section 2.1
Assignee Preamble
Assignee Indemnified Parties Section 9.1(b)
Assignor Preamble
Assignor Indemnified Parties Section 9.1(a)
Assumed Liabilities Section 2.2
Bioprocessing Business Section 8(a)
Claim Notice Section 9.2(a)
Closing Section 3.2
Closing Date Section 3.2
Contracts Section 4.4
Damages Section 9.1(a)
Escrow Agent Section 3.1
Escrow Agreement Section 3.1
Escrow Fund Section 3.1
Excluded Assets Section 2.3
Excluded Liabilities Section 2.4
Indemnification Claim Section 9.2(a)
Indemnified Party Section 9.2(a)
Indemnifying Party Section 9.2(a)
Material Contracts Section 4.4
Patent Applications Section 4.11
Permits Section 4.9(a)
Product Data Section 4.7(a)
Purchase Price Section 3.1
|
R&D Agreement Section 6.2(e) Securities Section 4.15 Shares Section 4.15 SI Preamble Third-Party Claim Section 9.2(a) |
2. Purchase of the Acquired Assets.
2.1. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, at the Closing, Assignor shall sell,
transfer and assign to Assignee, and Assignee shall purchase and acquire
from Assignor, all right, title and interest throughout the world in and
to all of the assets of Assignor (but not including any Excluded Assets,
as defined in Section 2.3), as they exist on the Closing Date (the
"Acquired Assets"), in each case free and clear of all Liens except for
the Assumed Liabilities, including without limitation:
(a) the Subject Patent Rights;
(b) all licenses and sublicenses relating to the Patent Rights set forth in Section 2.1(b) of the Disclosure Schedule;
(c) the Subject License;
(d) all Subject Sublicenses;
(e) the Subject IP;
(f) all Product Records related to the Bioprocessing Business and to the Subject License and Subject Sublicenses;
(g) to the extent transferable, all Permits, if any;
(h) all income, royalties, damages and payments due or payable as of the Closing Date or thereafter relating to any of the Subject IP, Subject License and Subject Sublicenses (including damages and payments for past, present or future infringement, misappropriation, dilution or other violation thereof, the right to sue, recover and retain damages for past, present or future infringement, misappropriation, dilution or other violation thereof, and any and all corresponding rights that, now or hereafter, may be secured);
(i) the right to defend against claims made that any of the
Subject IP or Subject Sublicenses infringes, misappropriates, dilutes or
otherwise violates the intellectual property rights of any person;
(j) the right to prosecute all Patent Applications and
maintain all Subject Patent Rights included in the Subject IP;
(k) to the extent the following relate to any Acquired Asset: all claims, causes of action, chooses in action, rights of recovery, and rights of set-off of any kind;
(l) all rights under any Assumed Contracts;
(m) to the extent that any of the following relate primarily to an Acquired Asset: all other assets of Assignor (whether real, personal or mixed, tangible or intangible);
(n) all goodwill and moral rights relating to any Acquired Asset; and
(o) all other assets of Assignor including its inventory and work-in-progress related to Bioprocessing and the Bioprocessing products, systems and methods owned or under development by or on behalf of Assignor.
2.2. Assumption of Liabilities. Effective as of the Closing Date, Assignee shall assume and agree to perform the Assumed Liabilities, as set forth in this Section 2.2. Assignee shall be responsible for payment and performance of, and agrees to pay and perform, and be solely responsible for all of (and Assignor shall have no responsibility with respect to) the Assumed Liabilities. The "Assumed Liabilities" shall mean the outstanding obligation not to exceed $230,000 of Assignor to UMBC under the Subject License, payment for which shall be made by Assignor at the Closing pursuant to Section 3.1(a)(iii) and all liabilities of Assignor arising under the Acquired Assets with respect to post-Closing conduct (other than liabilities or obligations attributable to any failure by Assignor to comply with the terms of any Assumed Contract except for the aforesaid $230,000 obligation to be paid by Assignee at the Closing pursuant to Section 3.1(a)(iii) or liabilities which both (x) are not apparent on the face of any Assumed Contract and (y) were not disclosed to Assignee in the Disclosure Schedule).
2.3. Excluded Assets. Nothing herein shall be deemed to sell, transfer, assign or convey to Assignee, Assignor's right, title and interest as of the Closing Date in and to all assets other than the Acquired Assets (the "Excluded Assets") including all computers, printers, photocopiers, fax machines and other office equipment and all business records of Assignor or any Assignor Affiliate not related to the Acquired Assets.
2.4. Excluded Liabilities. Assignor shall be responsible for payment and performance of, and agrees to pay and perform, and be solely responsible for all (and Assignee shall not have any responsibility with respect to any) liabilities and obligations of Assignor other than the Assumed Liabilities (the "Excluded Liabilities"), including all liabilities and obligations in any way relating to any Acquired Asset on or prior to the Closing Date.
3. Purchase Price and Closing.
3.1. Purchase Price. Subject to the other provisions of this Agreement, Assignee shall pay to Assignor, the purchase price (the "Purchase Price") as follows:
(a) at Closing (except as provided in (iv) below):
(i) $100,000 by wire transfer of immediate funds to Reitler Kailas & Rosenblatt LLC, as the Escrow Agent to be held pursuant to the Escrow Agreement in the form of Exhibit A hereto;
(ii) $160,000 by wire transfer of immediate funds to the account designed by Assignor;
(iii) $230,000 by a promissory note in the form of Exhibit B hereto payable to UMBC on behalf of Assignor and bearing interest at 3.25% (representing the prime rate of Chase Bank published in the Wall Street Journal on the date of Closing) with principal and interest payable in 36 equal monthly installments of $6,714.05;
(iv) Such number of restricted shares of Common Stock of SI registered in the name of the Assignor with an aggregate value of $400,000 (the ?Shares?) based on a per share value equal to the average of the closing bid and asked prices on the Over-the-Counter Bulletin Board for the three business days immediately prior to the Closing Date as reported in the OTC Market Report. One-third of the Shares shall be delivered to Assignor as soon as practicable but no later than three (3) business days following the Closing Date, and subject to the terms of the Escrow Agreement, the remaining two- thirds of the Shares shall be delivered to the Escrow Agent, of which one-half are to be delivered by the Escrow Agent to Assignor on each of the first and second anniversary of the Closing Date.
(b) In addition, Assignee shall pay Assignor within thirty (30) days following receipt an amount equal to (i) thirty percent (30%) of the Net Fees and Royalties (exclusive of Net Infringement Fees) received by Assignee or its assigns under a sublicense with respect to the Subject IP, (ii) fifty percent (50%) of the Net Infringement Fees received by Assignee or its assignee under a sublicense with respect to the Subject IP; and (iii) fifty percent (50%) of the one-time fees, if any, other than royalty fees, paid by a person with respect to the grant of a sublicense, which fees are not based on performance, sales, revenues or results of the sublicensing party.
3.2. Closing. The closing of the purchase and sale of the Acquired Assets (the "Closing") shall be held at 10:00 a.m. at the offices of Reitler Kailas & Rosenblatt LLC, 885 Third Avenue, 20th Floor, New York, NY 10022 (or remotely via exchange of documents and signature pages including via PDF and facsimile) on November 14, 2011 or such other date as the Parties may agree (the "Closing Date").
3.3. Instruments of Transfer. The transfer of the Acquired Assets to Assignee and the assumption of Assumed Liabilities by Assignee at the Closing shall be effected by the execution and delivery of one or more bills of sale and assignment and other instruments of transfer, all in forms prepared by Assignee and reasonably acceptable to Assignor.
3.4. Purchase Price Allocation. Assignee shall prepare an
allocation of the Purchase Price and Assumed Liabilities (and all
other capitalized costs) among the Acquired Assets in accordance
with Code Section 1060, which allocation shall be binding upon Assignor.
Assignee shall deliver such allocations to Assignor within sixty
(60) days after the Closing Date. Assignee and Assignor shall
report and file Tax Returns (including IRS Form 8594) in all respects
and for all purposes consistent with such allocation as prepared
by Assignee. Assignor shall timely and properly prepare, execute,
file and deliver all such documents and other information as Assignee
may reasonably request to prepare such allocation.
4. Representations and Warranties of Assignor. As a material inducement to Assignee and SI to enter into this Agreement and each of the other Related Documents to which it is a party, Assignor hereby represents and warrants to Assignee and SI that, except as set forth in the Disclosure Schedule, the following statements are true and correct as of the Closing Date:
4.1. Due Organization; Qualified; No Subsidiaries. Assignor is a corporation duly organized, validly existing and in good standing under the laws of Massachusetts. Assignor has corporate power to own its properties and to conduct its business as currently owned and conducted. Assignor does not have and has not had any subsidiaries and does not own and has not owned any equity interest in any other corporation or entity.
4.2. Authorization. Assignor has the full legal right, power and authority to enter into and perform the transactions contemplated by this Agreement and the other Related Documents to which it is a party, without need for any registration, qualification, consent, approval, authorization, license or order of, or notice to or filing with any Governmental Authority or other person. The execution, delivery and performance by Assignor of this Agreement and the other Related Documents to which it is a party and the consummation by Assignor of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by all necessary corporate action of Assignor, including approval of this Agreement and the other Related Documents to which Assignor is a party by the Board of Directors and the stockholders of Assignor. This Agreement and the other Related Documents to which Assignor is a party evidence the legal, valid and binding obligations of Assignor, enforceable against Assignor in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar Law relating to or affecting the rights and remedies of creditors generally. This Agreement and the other Related Documents to which Assignor is a party have been duly and validly executed and delivered by Assignor.
4.3. No Conflicts or Violation. The execution, delivery and performance by Assignor of this Agreement and the other Related Documents to which it is a party do not and will not violate or require any registration, qualification, consent, approval, authorization, license or order of, or notice to or filing under any Law by which Assignor or any of its assets or properties may be bound or conflict with, require any registration, qualification, consent, approval, authorization, license or order of, or notice to or filing under, or result in the breach or termination of any provision of, constitute a default under, result in the acceleration of the performance of Assignor's obligations under, result in the loss of Assignor's rights under, result in the vesting or enhancement of any other person's rights under or result in the creation of any Lien upon any of the Acquired Assets or businesses pursuant to (i) the certificate of incorporation, as amended, or by-laws of Assignor or any of its Affiliates or any shareholders' agreement that directly or indirectly is of relevance to the operation of Assignor, (ii) any Material Contract or Assumed Contract or (iii) any indenture, mortgage, deed of trust, license, permit, approval, consent, franchise, lease or other Contract to which Assignor is a party or by which Assignor or any of Assignor's assets is bound (in all of the foregoing cases whether with or without notice, lapse of time, or both, or the happening or the occurrence of any other event).
4.4. Contracts and Commitments. Section 4.4 of the Disclosure Schedule lists each of the following agreements, understandings, arrangements or commitments ("Contracts"), to the extent such Contract relates to any Acquired Asset:
(a) All Contracts between Assignor and any Affiliate(s) of any Insider or any member of any Insider's family;
(b) All purchase orders and contracts of Assignor outstanding as of the date of this Agreement;
(c) All Contracts relating to research and development conducted or to be conducted by or on behalf of Assignor, including clinical trial and testing Contracts;
(d) All Contracts pursuant to which Assignor licenses or has otherwise obtained from another person any right to use any of the Subject IP and all Contracts pursuant to which Assignor has licensed or otherwise assigned or transferred or agreed to license, assign or transfer to another person any right to any of the Subject IP;
(e) All confidentiality and nondisclosure Contracts, assignment of rights or inventions Contracts and non-competition Contracts and covenants under which Assignor or, any Assignor Affiliate that has been, is or will be engaged in the Exploitation of any Acquired Asset, is obligated and any Contract restricting Assignor or any Assignor Affiliate from Exploiting any Acquired Asset anywhere in the world;
(f) All Contracts relating to Liens on the Acquired Assets;
(g) All loan Contracts or other Contracts relating to debt obligations for borrowed money, all guarantees of or Contracts to acquire debt obligations of any person and all Contracts relating to loans made by Assignor to any person, including all Contracts relating to Liens intended to secure any such loan, debt obligation or guarantee;
(h) All Contracts relating to the settlement of any Litigation Matter executed after January 1, 2006 or currently in effect; and
(i) All other Contracts of Assignor that affect any Acquired Asset thereof that are not otherwise disclosed herein.
For purposes of this Agreement, each Contract listed in Section 4.4 of the Disclosure Schedule shall be a "Material Contract." Section 4.4 of the Disclosure Schedule also sets forth a description of all negotiations currently in process or contemplated that relate to any Material Contract.
4.5. Material Contracts; No Default; Assumed Contracts and Commitments; No Default.
(a) Assignor has delivered to Assignee true, correct and complete copies of all Material Contracts and all Assumed Contracts.
(b) All Material Contracts and Assumed Contracts are valid and in full force and effect, enforceable against and by Assignor in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar Law relating to or affecting the rights and remedies of creditors generally.
(c) All Material Contracts and Assumed Contracts were entered into by Assignor in the normal, usual and ordinary course of business and no other party thereto has asserted any right of defense, setoff or counterclaim with respect to any amount due or becoming due thereunder to Assignee after the Closing arising from events which precede the Closing Date.
(d) Assignor is not in default in the performance of any of its obligations under any Material Contract or Assumed Contract; no default has occurred which (whether with or without notice, lapse of time, or both, or the happening or the occurrence of any other event) would constitute an event of default by Assignor under any Material Contract or Assumed Contract; no other party thereto is in default under any Material Contract or Assumed Contract; and there has not occurred any event or condition which (whether with or without notice, lapse of time, or both, or the happening or the occurrence of any other event) constitutes a basis of force majeure or other claim of excusable delay or nonperformance by any person under any Material Contract or Assumed Contract. No notice has been received by Assignor claiming any default by Assignor under any Material Contract or Assumed Contract or indicating the intention of any other party thereto to amend, modify, rescind, terminate or default under any Material Contract or Assumed Contract, and Assignor is not aware of any threat thereof or basis therefore, and Assignor has not waived any material right under or with respect to any Material Contract or Assumed Contract.
4.6. Title to the Acquired Assets. Assignor has the full right to sell, transfer, and assign all of the Acquired Assets to Assignee, a nd has good and marketable title thereto, free and clear of all Liens. Following the Closing, Assignee will be the lawful owner of, and have good title to, the Acquired Assets, free and clear of all Liens. None of the Acquired Assets is in the possession, custody or control of any person other than Assignor.
4.7. Matters Relating to the Acquired Assets.
(a) Section 4.7(a) of the Disclosure Schedule provides a true, correct and complete list of the following (the "Product Data"):
(i) All locations at which Acquired Assets are located as of the Closing Date (including locations owned or controlled by third parties); and
(ii) A purchase item file, including names and addresses of all suppliers and subcontractors for all items currently used in connection with any Acquired Asset.
(b) No officer, director, employee or stockholder of Assignor has any proprietary interest in a Bioprocessing product, system, method or process constituting an Acquired Asset.
4.8. Litigation; Other Claims. Section 4.8 of the Disclosure Schedule provides a true, correct and complete list and brief description of all pending, resolved, or threatened Litigation Matters.
4.9. Licenses and Permits; Regulatory Filings; Legal
Compliance.
(a) Section 4.9(a) of the Disclosure Schedule provides
a true, correct and complete list of:
(i) all licenses, permits, orders, franchises, certificates, and other governmental authorizations, consents, rights, concurrences, registrations and approvals issued by any Governmental Authority that are specifically related to any Acquired Asset (collectively, the "Permits"); and
(ii) to the extent not listed pursuant to Section 4.9(a)(i), all Regulatory Correspondence of Assignor related to the Acquired Assets.
(b) All the Permits are valid and in full force and effect and all information submitted to the applicable Governmental Authority in order to obtain each such Permit was true, accurate and complete when submitted, and there is no impediment to any renewal thereof. Assignor and its Affiliates are in compliance with the respective requirements, conditions and provisions of all Permits and neither Assignor, nor any Assignor Affiliate has been informed by any Governmental Authority or any lawyer or consultant of Assignor or any Assignor Affiliate of any deficiency with respect to any Permit. No proceeding is pending or, to the Knowledge of Assignor or any Assignor Affiliate, threatened to revoke or amend any of such Permits nor are there facts or circumstances of which Assignor or any Assignor Affiliate is aware which form a basis upon which a Governmental Authority reasonably could seek to revoke or amend any Permit. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in a modification, impairment, revocation, suspension or limitation of any Permit. No Permit by its terms requires the consent of its issuing authority in order to remain in full force and effect after the execution and delivery of this Agreement or the consummation of the transactions contemplated by this Agreement.
4.10. Conduct of Business in Compliance with Regulatory Requirements; Warranties.
(a) Assignor is in compliance with all Law applicable to any Acquired Asset or the Exploitation of any Acquired Asset. Since January 1, 2006, neither Assignor, nor any Assignor Affiliate has been restrained in the Exploitation of any Acquired Asset or Assignor Product.
(b) Neither Assignor nor any Assignor Affiliate has made any false statement in, or material omission from, the applications, approvals, reports, or other submissions to the United States Patent Office, foreign patent office or other Governmental Authorities.
(c) Since January 1, 2006, neither Assignor, nor any Assignor Affiliate has made any false statement in, or material omission from, any report, study or other documentation prepared in conjunction with the applications, approvals, reports, or records submitted to or prepared for the United States Patent Office, foreign patent office or other Governmental Authorities relating to any Acquired Asset.
(d) Neither Assignor nor any Assignor Affiliate has made or offered any payment, gratuity, or other thing of value that is prohibited by any Law to personnel of the United States Patent Office, foreign patent office or other Governmental Authorities in connection with the approval of any patent application related to an Acquired Asset.
4.11. Subject IP.
(a) Issued Patents and Patent Applications. Neither Assignor nor any Assignor Affiliate owns or otherwise holds any ownership interest in any issued patents or Patent Rights included in the Subject Patent Rights other than the license rights set forth in the Subject License and Subject Sublicenses. Section 4.11(a) of the Disclosure Schedule provides a true, complete and correct list of all patents, applications for such patents, within the Subject Patent Rights, including the title, filing date, serial number and respective patent number.
(b) Title and Transfer. Pursuant to this Agreement, at the Closing, Assignor will transfer to Assignee all of its right, title and interest in and to all Subject IP, free and clear of all Liens. Except pursuant to the Subject Sublicenses included in the Acquired Assets: Assignor has not granted to any person any license, option or other rights to Exploit any Subject IP, including any Bioprocessing product, method or systems, whether requiring the payment of royalties or not; Assignor is not obligated to grant to any other person any license, option or other rights to Exploit any Subject IP, including any Bioprocessing product, method, systems or items, whether requiring the payment of royalties or not, and is not obligated (now or in the future) to make any payments to any third person with respect to any Subject IP, Subject Patent Right or other Acquired Asset whether by way of royalties, fees or otherwise (except pursuant to the Subject License and Subject Sublicenses and for maintenance and renewal fees payable to Governmental Authorities).
(c) Validity; Patentability. Except as set forth in
Section 4.11(c) of the Disclosure Schedule, there is no pending or, to
the Knowledge of Assignor, threatened Litigation Matter (and Assignor
has received no notice) (i) contesting the patentability, validity,
enforceability, ownership or right to use, assign, license or dispose
of any intellectual property right included in the Subject IP, or (ii)
asserting that any Subject IP or Subject Patent Right (or the
Exploitation of any Subject IP or Subject Patent Right or other
Acquired Asset) conflicts or will conflict with the intellectual
property rights of any other person. Assignor has received no
legal opinion (written or oral) from an attorney or patent agent
regarding the Subject IP that has not been disclosed to Assignee.
(d) Misappropriation; Non-Infringement. Assignor has not misappropriated any patent, invention, process, method, compound, design, formula or other proprietary or intellectual property rights of any third person that are incorporated in the Subject IP or in any way relate to Bioprocessing. The practice of the Subject IP, in the manner practiced by or on behalf of Assignor in the Exploitation of any Bioprocessing item does not infringe or otherwise violate any proprietary or intellectual property right of any third person. There are no rights owned by Assignor or Assignor Affiliate or any other person that would prevent the Exploitation by Assignee of the Subject IP, or any other Acquired Asset within its terms. Assignor has received no notice of any infringement or alleged infringement relating to the Subject IP or the Acquired Assets and, to the Knowledge of Assignor, there is no threat thereof or basis therefor.
(e) No Conflict. The execution, delivery and performance by Assignor of this Agreement and the other Related Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby do not and will not (whether with or without notice, lapse of time, or both, or the happening or the occurrence of any other event): constitute a breach of or result in a modification of any Contract to which Assignor is a party or relating to any Subject IP, Subject License or Subject Sublicense, or cause the (or give rise to a right of) forfeiture or termination of any Subject IP, Subject License or Subject Sublicense or impair the right of Assignor or Assignee to Exploit any Bioprocessing item, any Subject IP, Subject License or Subject Sublicense.
(f) Sufficiency. The Subject IP, Subject License and Subject Sublicenses constitute all intellectual property rights used by, owned by or licensed to (or otherwise available to) Assignor or any Assignor Affiliate that are or have been used or held for use in Bioprocessing through the Exploitation of the Acquired Assets. Assignor does not have knowledge of any intellectual property rights (other than the Subject IP, Subject License and Subject Sublicenses) that are used or reasonably necessary for the Exploitation of the Acquired Assets.
(g) Trade Secrets. Except as permitted by the Subject License and Subject Sublicenses included in the Acquired Assets, Assignor is the sole owner of all Trade Secrets, free and clear of all Liens. Assignor has not misappropriated any of the Trade Secrets. Neither Assignor nor any Assignor Affiliate, nor to Assignor?s Knowledge, any other person, has taken or omitted to take any action that has made or may make the Trade Secrets part of public knowledge or literature, or used, divulged, or appropriated the Trade Secrets for the benefit of any person other than Assignor or to the detriment of Assignor. Assignor has taken reasonable steps to protect the confidentiality of all Trade Secrets, including entering into confidentiality and assignment agreements with all Assignor Affiliates having access to Confidential Information relating to any Acquired Asset and prohibiting them from disclosing such information or using the same for their own benefit, for the benefit of any person other than Assignor or to the detriment of Assignor. To the Knowledge of Assignor, no person is in breach of any such confidentiality and assignment agreement in any respect that could negatively affect the Subject IP, Subject License or Subject Sublicenses or Assignor's or Assignee's rights therein.
(h) Insiders and Assignor Affiliates. No part of the Subject IP is owned by, licensed from or licensed to any Insider or any Assignor Affiliate.
4.12. Financial Statements. Assignor has delivered to Assignee unaudited balance sheets of Seller as at September 30, 2010 and September 30, 2011 and the unaudited statements of operations for the 12 month periods ended September 30, 2010 and September 30, 2011 and the three month periods ended September 30, 2010 and September 30, 2011, including in each case the notes thereto certified by Assignor's chief financial officer. The note to the September 30, 2011 Balance Sheet includes a note itemizing the individuals amounts of receivables and of payables as of September 30, 2011. Such financial statements fairly present the financial condition and the results of operations, of Assignor as at the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP. The financial statements referred to in this Section 4.12 reflect the consistent application of such accounting principles throughout the periods involved, except as disclosed in the notes to such financial statements. Since September 30, 2011, there has not been any change in the assets, liabilities, financial condition or operating results of Assignor from that reflected in the financial statements referred to in this Section 4.12, except changes in the ordinary course of business that have not caused, in the aggregate, a material adverse effect on the financial condition, business, operations or prospects of Assignor.
4.13. Environmental Matters. Assignor is in compliance with applicable Environmental Law.
4.14. Absence of Certain Liabilities. Assignor has no liabilities of any nature (matured or unmatured, accrued, fixed or contingent), which have had or have a reasonable probability of having a Material Adverse Effect.
4.15. Investment Representations. Assignor is an "accredited investor" as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act"). Assignor is acquiring the Shares for its own account and has and will have on the Closing Date no current arrangements or understandings for the resale or distribution to others and will only resell the Shares or any part thereof pursuant to an effective registration statement or an available exemption under applicable Law. The Assignor does not presently have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity or to any third person or entity with respect to any of the Shares or interest in any of the foregoing securities. The Assignor acknowledges that the offer and sale of the Shares have not been registered under the Securities Act or the securities Laws of any state or other jurisdiction, and that the Shares are being offered and sold pursuant to an exemption from registration contained in the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Assignor's representations as expressed herein or otherwise made pursuant hereto, and the Shares cannot be disposed of unless they are subsequently registered under the Securities Act and applicable state laws or an exemption from such registration is available. The Assignor understands and agrees that the Shares will bear a legend substantially similar to the legend set forth below in addition to any other legend that may be required by applicable Law, the Certificate of Incorporation or Bylaws of SI, as the same may be amended from time to time, the Escrow Agreement or by any other agreement between SI and Assignor:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS AND MAY NOT BE TRANSFERRED, SOLD,
PLEDGED OR HYPOTHECATED EXCEPT (A) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND
APPLICABLE STATE SECURITIES LAWS, OR (B) THE
COMPANY RECEIVES AN OPINION OF COUNSEL OR
OTHER EVIDENCE REASONABLY SATISFACTORY TO
THE COMPANY AND ITS COUNSEL THAT THE PROPOSED
TRANSACTION IS EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS."
4.16. Brokerage. There has been no intermediary or broker in negotiations or discussions incident to the execution of this Agreement or any of the transactions contemplated hereby on behalf of Assignor or any Assignor Affiliate. Assignee shall not be responsible for, and Assignor hereby indemnifies Assignee and SI against, any commission or other
compensation due or becoming due with respect to any such transactions as a result of the engagement of any such person by Assignor or any Assignor Affiliate.
4.17. Disclosure. The representations and warranties contained in this Section 4, when considered as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this Section 4 not misleading.
5. Representations and Warranties of Assignee and SI. As a material inducement to Assignor to enter into this Agreement and each of the other Related Documents to which it is a party, Assignee and SI hereby severally represent and warrant to Assignor that the following statements are true and correct as of the date of this Agreement:
5.1. Due Organization. Each of Assignee or SI is a corporation duly organized, validly existing and in good standing under the laws of Delaware. Each has corporate power to own its properties and to conduct its businesses as currently owned and conducted and to execute, deliver and perform this Agreement.
5.2. Authorization; Binding Obligations. Each of Assignee and SI has the full legal right, power and authority to enter into and perform the transactions contemplated by this Agreement and the other Related Documents to which it is a party, without need for any registration, qualification, consent, approval, authorization, license or order of, or notice to or filing with any Governmental Authority or other person. The execution, delivery and performance by Assignee and SI of this Agreement and the other Related Documents to which it is a party and the consummation by Assignee and SI of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by all necessary corporate action of Assignee and SI. This Agreement and the other Related Documents to which Assignee or SI is a party evidence the legal, valid and binding obligations of such party, enforceable against it in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar Law relating to or affecting the rights and remedies of creditors generally. This Agreement and each other Related Document to which Assignee is a party have been duly and validly executed and delivered by Assignee. This Agreement and each other Related Document to which SI is a party have been duly and validly executed and delivered by SI.
5.3. No Default or Violation. The execution, delivery and performance by Assignee and SI of this Agreement and the other Related Documents to which it is a party and the consummation by Assignee and SI of the transactions contemplated hereby and thereby do not, and will not (whether with or without notice, lapse of time, or both, or the happening or the occurrence of any other event), conflict with any provision of the certificate of incorporation or bylaws of Assignee or of SI, and do not, and will not (whether with or without notice, lapse of time, or both, or the happening or the occurrence of any other event), violate any Law to which Assignee or SI or any of its properties is subject.
5.4. Securities Filings. Assignee has filed all forms, reports, statements and documents required to be filed with the Securities and Exchange Commission (the "SEC") since June 30, 2008, each of which has complied in all material respects with the applicable
requirements of the Securities Act and the Securities Exchange Act of 1934, as amended, each as in effect on the date so filed (collectively, the "SEC Filed Documents". The SEC Filed Documents are available on the SEC's website at www.sec.gov. As of their respective dates, or as of the date of the last amendment thereof, if amended after filing, none of the SEC Filed Documents contained a material fact or omitted or to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
5.5. Brokerage. There has been no intermediary or broker in negotiations or discussions incident to the execution of this Agreement or any of the transactions contemplated hereby on behalf of Assignee or SI. Assignor shall not be responsible for, and Assignee and SI hereby indemnify Assignor against, any commission or other compensation due or becoming due with respect to any such transactions as a result of the engagement of any such person by Assignee or SI.
5.6. Valid Issuance of Shares. The Shares, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Escrow Agreement and applicable state and federal securities laws and liens or encumbrances created by or imposed by Assignor. Assuming the accuracy of the representations and warranties of Assignor contained in Section 4.15 of this Agreement, the offer, sale and issuance of the Shares will be exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act").
6. Conditions Precedent to Closing
6.1. Conditions to Each Party's Obligations under this Agreement. The respective obligations of each Party under this Agreement shall be subject to the fulfillment as of the Closing of the following conditions:
(a) Injunctions. No Party hereto shall be subject to any order, decree or injunction of a court or agency of competent jurisdiction which enjoins or prohibits the consummation of any of the transactions contemplated by this Agreement and the other Related Documents;
(b) Approvals and Authorizations. All necessary registrations, qualifications, consents, approvals, authorizations, licenses or orders of all Governmental Authorities required to consummate the transactions contemplated by this Agreement and the other Related Documents shall have been obtained and shall remain in full force and effect and all waiting periods relating to such registrations, qualifications, consents, approvals, authorizations, licenses or orders shall have expired; and
(c) Litigation. There shall not be any pending or threatened Litigation Matter that shall seek to restrain, prohibit or invalidate any of the transactions contemplated by this Agreement and the other Related Documents.
6.2. Conditions to Obligations of Assignee and SI. The obligations of Assignee and SI to complete the transactions to be consummated at the Closing are subject to the satisfaction as of the Closing of all of the following conditions (or the waiver thereof by Assignee and SI):
(a) Each of the representations and warranties of Assignor in this Agreement shall be true and correct as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, with respect to which such representations and warranties shall be true and correct as of such earlier date);
(b) Assignor shall have duly complied with and performed
all of the terms, covenants and conditions of this Agreement to be
complied with or performed by Assignor at or before the Closing;
(c) Assignor shall have amended its certificate of
incorporation to change its name to "BioDox R&D Corporation";
(d) Assignor shall have executed and delivered to Assignee, a Research and Development Agreement in the form of Exhibit C hereto (the "R&D Agreement") to provide research and development services on behalf of Assignee with respect to Bioprocessing and the Acquired Assets;
(e) Dr. Qualitz, Dr. Alexander and Dr. Govind Rao shall have executed and delivered to SI and the Assignee Non-Competition Agreements in the form of Exhibit D with respect to Dr. Qualitz and Exhibit D-1 with respect to Drs. Alexander and Rao hereto.
(f) This Agreement and the R&D Agreement shall have been approved by the Board of Directors of Assignor and the owners of at least 66 2/3 % of the outstanding shares of each class of capital stock of Assignor.
(g) Assignor shall have delivered to Assignee and SI, the written consents of UMBC and each of the Subject Sublicensees (other than SI) to the assignment of the related license and sublicenses to the Assignee provided herein.
(h) Assignee and SI shall have received the opinion of Cooley LLP, counsel to Assignor, dated as of the Closing Date, substantially in the form set forth in Exhibit E to this Agreement;
(i) Assignor shall have executed and delivered to Assignee such bills of sale and other instruments of transfer and assignment, including license assignments in recordable form, and such other documents (including any consents thereto by third parties necessary to make the same valid and effective), in such form and containing such terms and provisions as Assignee may reasonably request, as shall be necessary to vest in Assignee all right, title and interest in and to the Acquired Assets free and clear of any and all Liens other than the Assumed Liabilities;
(j) There shall not be any pending or threatened Litigation Matter that shall affect the right of Assignee to own, use or control any Acquired Asset or Assignee's title therein after the Closing Date;
(k) There shall not have been any Material Adverse Effect (whether or not covered by insurance) nor shall Assignor have suffered the loss or expiration of any License or Sublicense, Permit or any material adverse change to any Assumed Contract;
(l) Assignor shall have obtained and filed releases with respect to all Liens of record with respect to the Acquired Assets;
(m) Assignor shall have executed and delivered to Assignee each of the Related Documents to which it is a party;
(n) Assignee shall have received from Assignor a certificate, dated as of the Closing Date, executed by the Secretary of Assignor, certifying the incumbency of each person executing this Agreement or any other Related Document on behalf of Assignor, and the authenticity of the Board of Directors and stockholder resolutions authorizing the transactions contemplated by this Agreement and the other Related Documents to which Assignor is a party.
(o) SI shall have received a copy of the Amendment to the Articles of Organization of Assignor changing its name to BioDox R&D Corporation, certified by the Secretary of the Commonwealth of Massachusetts.
(p) Assignee shall have received from Assignor a certificate, dated as of the Closing Date, executed by the President of Assignor, certifying that the conditions specified in the preceding clauses of this Section 6.2 have been fulfilled; and
6.3. Conditions to Obligations of Assignor. The obligations of Assignor to complete the transactions to be consummated at the Closing are subject to the satisfaction as of the Closing of all of the following conditions (or the waiver thereof by Assignor):
(a) Each of the representations and warranties of Assignee and SI in this Agreement shall be true and correct as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, with respect to which such representations and warranties shall be true and correct as of such earlier date);
(b) Assignee and SI shall have duly complied with and performed all of the terms, covenants and conditions of this Agreement to be complied with or performed by Assignee and SI at or before the Closing;
(c) Assignee shall have executed and delivered to Assignor the R&D Agreement.
(d) Assignee and SI shall have executed and delivered to Assignor each of the other Related Documents to which it is a party;
(e) Assignor shall have received from Assignee a certificate, dated as of the Closing Date, executed by an officer of Assignee, certifying that the conditions specified in the preceding clauses of this Section 6.3 have been fulfilled;
(f) Assignor shall have received from Assignee and from SI a certificate, dated as of the Closing Date, executed by its respective Secretary or Assistant Secretary, certifying the
incumbency, respectively, of each officer of Assignee and of SI executing this Agreement or any other Related Document to which Assignee or SI is a party, and the authenticity of the resolutions authorizing the transactions contemplated by this Agreement and the other Related Documents to which Assignee or SI is a party; and
(g) Assignor shall receive the portion of the Purchase Price payable or issuable to it at Closing.
7. Post-Closing Matters
7.1. Covenant of Further Assurances
(a) Assignor shall, at any time and from time to time after the Closing Date, upon the reasonable request of Assignee, execute, acknowledge, seal and deliver all such instruments and documents, and do all such further things, as Assignee may reasonably request to perfect the transfer of any and all of the Acquired Assets that are to be sold, transferred and assigned to Assignee under this Agreement or any of the other Related Documents (including taking any actions necessary to assure Assignor's proper corporate authorization with respect to the transactions contemplated by this Agreement and the other Related Documents) and to deliver or cause to be delivered such Acquired Assets to Assignee in accordance with the terms of this Agreement and the other Related Documents. In addition, Assignor shall use commercially reasonable efforts to obtain for Assignee all such consents, licenses, permits and approvals as may be required for Assignor to perform its obligations under this Agreement or under the other Related Documents or as are necessary or desirable to accomplish the purchase and sale of the Acquired Assets or to enable Assignee to fully Exploit any Acquired Asset, and to provide to Assignee any records or other data relating to any Acquired Asset which were not previously delivered to Assignee.
(b) Assignor, Assignee and SI shall do or procure to be done all such further acts and things, and execute or procure the execution of all such other documents, as such Party may from time to time reasonably require, whether on or after the Closing, for the purpose of giving to such other Party or Parties the full benefit of all of the provisions of this Agreement and the other Related Documents.
7.2. Payment of Taxes. Assignor shall pay, promptly and when due, whether at the original time fixed therefor or pursuant to any extension of time to pay, any and all Taxes that shall become due or shall have accrued on account of Assignor's ownership of the Acquired Assets, Taxes arising from gains realized by Assignor resulting from any of the transactions contemplated by this Agreement, and Taxes related to the transfer of the Acquired Assets to Assignee.
7.3. Defense of Claims and Litigation. At all times from and after the Closing Date, and without charge except for reimbursement of out-of-pocket expenses, each Party shall consult, confer and cooperate in good faith on a reasonable basis with the other Parties (including the making available of witnesses and cooperation in discovery proceedings) in the conduct or defense of any Litigation Matter against such other Party or Parties or any of its Affiliates by any third person that relates to any Acquired Asset or any Assumed Liability or any matter that,
directly or indirectly, arises therefrom, whether known at the Closing Date or arising thereafter. The foregoing notwithstanding, to the extent the indemnification provisions of this Agreement or the provisions of the R&D Agreement apply to any such conduct or defense, they shall control as to the payment of costs and expenses.
7.4. Retention of Records. Assignor agrees to retain and cause its Affiliates to retain, any material books, records, documents, instruments, accounts, financial information, Tax information, production records, employment records, correspondence, writings, evidences of title and other papers or information (i) relating to the Acquired Assets as Assignor possessed or controlled immediately before the Closing and did not transfer to Assignee hereunder and (ii) relating to the performance by Assignor of its obligations under this Agreement and the other Related Documents for seven (7) years following Closing Date or for such longer period as may be required by any Law applicable to Assignee or any of its Affiliates and, in any event, to notify Assignee prior to the destruction of any of such materials and, upon the request of Assignee, to turn over to Assignee any of such materials.
7.5. Sharing of Data. Assignee shall have the right for a period of seven (7) years following the Closing Date to have reasonable access to such material books, records, documents, instruments, accounts, financial information, Tax information, production records, employment records, correspondence, writings, evidences of title, and other papers or information to the extent that they relate to (i) the Acquired Assets or (ii) the performance by Assignor of its obligations under this Agreement or the other Related Documents for the limited purposes of complying with applicable Law and defending against a claim or litigation relating to any Acquired Asset. Such access will be subject to the confidentiality obligations of this Agreement.
7.6. Confidentiality.
(a) Obligation. Until the date which is seven (7) years following Closing Date (or, with respect to Trade Secrets, indefinitely), Assignor shall, and shall secure the agreement of its Affiliates, to, keep confidential and not disclose to any third person or use, any Confidential Information relating to any Acquired Asset, including, by way of example, any aspect of any Subject IP, Subject License or Subject Sublicense that has not previously been made public and any vendor lists, specifications, formulae, know-how, or other proprietary data.
(b) Exceptions. Assignor may disclose Confidential Information to the extent such disclosure is reasonably necessary to prosecute or defend litigation, to comply with applicable Law, to obtain necessary or desirable regulatory approvals, to respond to a valid order of a Governmental Authority, provided that, other than with respect to disclosure for protecting intellectual property rights in which such disclosure is required by applicable Law, Assignor shall (i) use reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed, and (ii) unless precluded by applicable Law from doing so, give advance notice to Assignee and SI sufficiently in advance of the proposed disclosure so as to permit Assignee or SI to have the opportunity to object to such disclosure or otherwise protect its Confidential Information.
8. Non-Competition Covenant.
(a) Until a date five years from the Closing Date, Assignor agrees not to, and shall secure the agreements of Assignor Affiliates not to, directly or indirectly, participate or engage in the following activities or businesses within the United States of America, South America, Europe or Asia ("Competitive Activities"): (i) developing or providing products or services which compete with the Bioprocessing Business of the Assignee or of SI; (ii) soliciting, or endeavoring to entice away, any person or entity who is or was a customer of SI or any other subsidiary of SI, including Assignee (collectively, a "Protected Entity") or encouraging any such person or entity to use any products or services which compete with the Bioprocessing Business if offered by anyone other than a Protected Entity; (iii) assisting any person or entity in any way to do, or attempt to do, anything prohibited by clauses (i) or (ii) above and (iv) directly or indirectly soliciting, recruiting or hiring any person employed by a Protected Entity.
(b) Notwithstanding anything to the contrary contained in this Section 1, the foregoing covenant in Section 8(a) shall not be deemed breached as a result of the ownership by the Assignor and Assignor Affiliate of less than an aggregate of (i) three percent (3%) of any class of stock of an entity engaged in Competitive Activities; provided, that such stock is listed on a national securities exchange or is quoted on the National Market System of the Nasdaq Stock Market or (ii) two percent (2%) in value of any instrument of indebtedness of an entity engaged in Competitive Activities.
9. Indemnification Provisions
9.1. Indemnification.
(a) Assignee's and SI's Indemnification Obligations. On and after the Closing Date, Assignee and SI by this Agreement agree to indemnify, defend and hold harmless Assignor and each of its Affiliates, and each of their respective directors, officers, employees, agents, successors and assigns (collectively, the "Assignor Indemnified Parties") from and against and in respect of any and all claims, losses, damages, costs, expenses, obligations, liabilities, charges, actions, suits, proceedings, deficiencies, interest, penalties and fines (including costs of collection, attorney?s fees and other costs of defense, costs of enforcing indemnification provisions, and expenses of investigation) (collectively, "Damages") imposed on, sustained, incurred or suffered by or asserted against any of them, as and when the same are incurred by any Assignor Indemnified Party, directly or indirectly, in respect of, but only in respect of:
(i) any breach of Assignee's or SI's representations and warranties contained herein or in any certificate delivered by Assignee or SI pursuant to the terms of this Agreement;
(ii) Assignee's or SI's failure to perform or otherwise fulfill any of its agreements, covenants, obligations or undertakings under this Agreement; and
(iii) the Assumed Liabilities.
Assignee and SI shall not be responsible for any Damages to the extent that such Damages are due to the negligence or willful misconduct of Assignor or an Assignor Affiliate.
(b) Assignor's Indemnification Obligations. On and after the Closing Date, Assignor by this Agreement agrees to indemnify, defend and hold harmless Assignee and SI and each of their respective Affiliates, and their respective directors, officers, employees, agents, successors and assigns (collectively, the "Assignee Indemnified Parties"), from and against and in respect of any and all Damages imposed on, sustained, incurred or suffered by or asserted against any of them, as and when the same are incurred by any Assignee Indemnified Party, directly or indirectly, but only in respect of:
(i) any breach of Assignor's or SI's representations and warranties contained herein or in any certificate delivered by Assignor pursuant to the terms of this Agreement;
(ii) Assignor's failure to perform or otherwise fulfill any of its agreements, covenants, obligations or undertakings under this Agreement;
(iii) all claims alleging that the Exploitation of any Acquired Asset as such Acquired Asset exists as of the Closing Date infringes any intellectual property right of a third party;
(iv) all Excluded Liabilities (which term includes all Assignor-Related Claims);
(v) all claims, actions or proceedings, or threatened claims, actions or proceedings, relating to or arising from any of the transactions contemplated by this Agreement that may be brought or made by any person having contractual or business relations with Assignor on or before the expiration or termination of the R&D Agreement; and
(vi) all claims, actions or proceedings, or threatened claims, actions or proceedings, relating to or arising from Assignee not properly acquiring ownership of any of the Acquired Assets.
Assignor shall not be responsible for any Damages to the extent that such Damages are due to the gross negligence or willful misconduct of Assignee or SI.
9.2. Indemnification Procedure.
(a) Claims Notice. Whenever any claim shall arise for indemnification under this Agreement (an "Indemnification Claim"), the person seeking indemnification (the "Indemnified Party") shall promptly notify the Party from whom indemnification is sought (the "Indemnifying Party") in writing of the Indemnification Claim ("Claim Notice"), which Claim Notice shall set forth such Indemnification Claim in reasonable detail. In the event of any such Indemnification Claim resulting from or in connection with any claim, demand or legal proceedings by a third party (a "Third-Party Claim"), the Claim Notice to the Indemnifying Party shall specify, if known, the amount or an estimate of the amount of the Damages arising therefrom. The failure of the Indemnified Party to give the Indemnifying Party prompt notice as provided herein shall not relieve the Indemnifying Party of any of its obligations under this
Section 9, except to the extent that the Indemnifying Party is materially prejudiced by such failure.
(b) Conflicts Between the Parties. If the Claim Notice does not involve a Third-Party Claim, and if the Indemnifying Party objects in writing within ten (10) business days of its receipt of the Claim Notice to any indemnity in respect of any such Claim Notice, then the Indemnifying Party and the Indemnified Party sending such Claim Notice shall attempt in good faith to agree upon the rights of the respective parties with respect to the Indemnification Claim to which the Claim Notice relates. If the Indemnifying Party and the Indemnified Party so agree, the Indemnifying Party shall promptly make the agreed-upon payment.
(c) Third-Party Claims. The Indemnifying Party shall
have thirty (30) days after receipt of the Claim Notice with respect to
a Third-Party Claim to assume the conduct and control of the settlement
or defense of such the Third-Party Claim, through counsel of its own
choosing (but reasonably satisfactory to the Indemnified Party) and at
the Indemnifying Party's own expense, and the Indemnified Party shall
cooperate with it in connection therewith; provided, that the Indemnified
Party may participate in such settlement or defense through counsel
chosen by such Indemnified Party and the fees and expenses of such
counsel shall be borne by such Indemnified Party with no right to
indemnification therefor unless (i) the employment thereof has been
specifically authorized by the Indemnifying Party in writing, (ii)
the Indemnified Party reasonably concludes (based on the advice of
counsel) that there exists a conflict of interest between the
interests of the Indemnified Party and the Indemnifying Party, or
(iii) the Indemnifying Party has after a reasonable time failed to
employ counsel to assume or to continue to maintain such defense, in
each of which events the Indemnified Party may retain counsel which
shall be reasonably satisfactory to the Indemnifying Party, and the
Indemnifying Party shall pay the reasonable fees and expenses of such
counsel for the Indemnified Party (but in no event shall the
Indemnifying Party be obligated to pay fees and expenses of more than
one firm for all Indemnified Parties). Except as otherwise provided
in this Section 9.2(c), so long as the Indemnifying Party is
reasonably contesting any such Third-Party Claim in good faith, the
Indemnifying Party shall have the exclusive right to conduct and
control the defense of the Third-Party Claim and the Indemnified
Party shall not pay or settle any such Third-Party Claim without the
consent of the Indemnifying Party. If the Indemnifying Party does
not notify the Indemnified Party within thirty (30) days after the
receipt of the Indemnified Party's Claim Notice with respect to a
Third-Party Claim that it elects to undertake the defense thereof
(or does not fulfill its commitment to undertake such defense), the
Indemnified Party shall have the right to contest, settle or
compromise the Third-Party Claim but shall not thereby waive any
right to indemnity therefor pursuant to this Agreement. The
Indemnifying Party shall not, except with the written consent of
the Indemnified Party, consent to the entry of any judgment or
enter into any settlement that does not include as an unconditional
term thereof the giving by the person asserting such Third-Party
Claim of an unconditional release from all liability with respect to
such Third-Party Claim to all Indemnified Parties (i.e., Assignor
Indemnified Parties or Assignee Indemnified Parties, as the case
may be).
(d) Third Party Beneficiaries. The Assignee Indemnified Parties and Assignor Indemnified Parties are intended to be third party beneficiaries of the rights granted under this Section 9.2 and to have the right to enforce such rights directly against the applicable Indemnifying Party.
9.3. Survival of Representation and Warranties. Notwithstanding any investigation conducted before or after the Closing, and notwithstanding any knowledge or notice of any fact or circumstance that either Assignor on one hand or Assignee or SI on the other hand may have as the result of such investigation or otherwise, the representations and warranties shall survive the Closing indefinitely.
10. Miscellaneous.
10.1. Waivers and Amendments.
(a) This Agreement may be amended, modified or supplemented only by a written instrument executed by the Parties hereto.
(b) No waiver of any provision of this Agreement, or consent to any departure from the terms of this Agreement, shall be effective unless the same shall be in writing and signed by the Party waiving or consenting thereto. No failure on the part of any Party to exercise, and no delay in exercising, any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right or remedy. The waiver by any Party hereto of a breach of any provision of this Agreement shall not operate as a waiver of any subsequent breach. Except as otherwise specifically provided herein, all rights and remedies under this Agreement are cumulative and are in addition to and not exclusive of any other rights and remedies provided by Law.
10.2. Performance. Assignor acknowledges that money damages alone will not adequately compensate Assignee or SI for Assignor's or Assignor's Affiliates' breach of Section 7.6 or of Section 8, and, therefore, agrees that in the event of such breach or threatened breach, in addition to all other remedies available to Assignee or SI, at law, in equity or otherwise, Assignee or SI shall be entitled, if warranted, to an injunction restraining any such breach or threatened breach, or a decree of specific performance, without posting any bond or security. The remedy in this Section 10.2 is in addition to, and not in lieu of, any other rights or remedies Assignee or SI may have.
10.3. Notices. Any notice required or permitted by this Agreement shall be in writing and shall be (a) delivered personally, effective on the date of delivery, (b) sent via an internationally recognized express international courier service, such as Federal Express or DHL, to be effective three (3) business days following deposit, or (c) sent by facsimile to be effective on the date of confirmed transmission, provided that a confirmation copy is sent no later than the next business day via an internationally recognized express international courier service, such as Federal Express or DHL. Notices shall be addressed to the Party concerned at the address indicated below or at such other address as such Party may subsequently designate by like notice from time-to-time:
(a) if to Assignor, to:
Fluorometrix Corporation
24 Timber Edge Road
Stow, Massachusetts 01775
Attention: Joseph E. Qualitz, President
Telecopier No.: ___________
(b) if to Assignee or SI, to:
70 Orville Drive
Bohemia, New York 11716
Attention: Helena R. Santos, President
Telecopier No.: (631) 567-5896
with a required copy to:
Reitler Kailas & Rosenblatt LLC.
885 Third Avenue, 20th floor
New York, New York 10022
Attention: Leo Silverstein
Telecopier No.: (212) 371-5500
10.4. Expenses. Each Party hereto shall pay its own expenses in connection with the transactions contemplated by this Agreement, whether or not they are completed. In the event of any conflict between this provision and the indemnification or termination provisions of this Agreement, the indemnification or termination provisions, as the case may be, shall control.
10.5. Publicity. Except as required by applicable Law (but only if the Party affected by such Law shall have given the other Party or Parties advance written notice of the specific manner in which such requirements affect or modify the obligations that would otherwise apply to such Party under this Section 10.5), no Party shall use the name of the other Parties or any Affiliate of the other Parties in any publicity or advertising without the prior written approval of the other Parties. Except as may be required by applicable Law (and subject to the advance written notice described in the previous sentence), no Party shall disclose any terms or conditions of this Agreement without the prior written consent of the other Parties; provided, that SI may, without the prior consent of Assignor, make such public disclosure as may be required by Law or regulations of any stock exchange or other Governmental Authority.
10.6. Entire Agreement. This Agreement (including the Disclosure Schedule, the Appendices and the Exhibits) and the other Related Documents constitute the entire agreement between and among the Parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, whether written or oral, between the Parties in connection with such subject matter.
10.7. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the substantive law of the State of New York without giving effect to any conflict-of-law provision. The Parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts located in New York for any actions, suits or proceedings arising out of or relating to this Agreement (and each Party agrees not to commence any action, suit or proceeding relating thereto except in such courts), and
further agree that service of any process, summons, notice or document in accordance with Section 10.3 hereof shall be effective service of process for any action, suit or proceeding brought against the Parties in any such court. The Parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement in the state and federal courts located in New York, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
10.8. Interpretation. When reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement, unless otherwise indicated. References to Sections include subsections, which are part of the related Section. The recitals hereto constitute an integral part of this Agreement. The table of contents and headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. The language used in this Agreement shall be deemed to be the language chosen by the Parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any Party. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa. Any reference to Law shall be deemed to refer to such Law as such Law may be in effect from time to time, unless the context requires otherwise. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The term "or" shall have the inclusive meaning frequently identified with the phrase "and/or." No summary of this Agreement prepared by any Party shall affect the meaning or interpretation of this Agreement.
10.9. Modification. It is the intention of the Parties that this Agreement be enforced in accordance with its specific terms. However, if it should for some reason be contrary to public policy to effectuate the intentions of the Parties in interpreting this Agreement, the Parties have agreed as follows:
(a) In the event that any court to which a dispute is submitted determines that any provision of this Agreement is invalid or unenforceable by reason of its extending for too great a period of time or over too large a geographic area or over too great a range of activities, the Parties agree that the court shall have the power to reduce the scope, duration, or geographic area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the decision may be appealed.
(b) If the court shall determine that any provision of this Agreement is invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the other provisions of this Agreement shall not be affected thereby. Any invalid, illegal or unenforceable provision of this Agreement shall be severable, and after any such severance, all other provisions of this Agreement shall remain in full force and effect. In all such cases, the Parties shall use their
reasonable best efforts to substitute a valid, legal and enforceable provision which, insofar as practicable, implements the original purposes and intents of this Agreement.
10.10. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.
10.11. Disclosure Schedule and Exhibits. The Disclosure Schedule and Exhibits mentioned in this Agreement shall be attached to this Agreement and shall form an integral part of this Agreement. All capitalized terms defined in this Agreement which are used in the Disclosure Schedule or any Exhibit shall, unless the context otherwise requires, have the same meaning therein as given herein.
10.12. Counterparts and Facsimile Signatures. This Agreement, the Disclosure Schedule and all Exhibits hereto may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each Party and delivered to the other Party, it being understood that all Parties need not sign the same counterpart. Facsimile execution and delivery of this Agreement, the Disclosure Schedule and any Exhibits by any of the Parties shall be legal, valid and binding execution and delivery of such document for all purposes.
10.13. No Assignment by Assignor. This Agreement is personal
to Assignee and SI, and Assignor shall not assign any of its rights or
delegate any of its obligations under this Agreement without the prior
written consent of Assignee and SI, which consent may be withheld
for any reason. Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of and be enforceable by the Parties
and their respective successors and permitted assigns. In addition, the
rights to indemnification set forth in Section 9 shall inure to the benefit
of and be enforceable by each of the indemnitees described therein. All
assignees of this Agreement shall assume the assignor?s obligations under
this Agreement in writing. Without the consent of Assignor, Assignee and
SI may assign their respective rights under this Agreement and delegate
its obligations under this Agreement, in whole or in part, to any person
that shall acquire the Acquired Assets if such person shall assume their
obligations under this Agreement in writing, or the merger or consolidation
of Assignee or SI with or into, any other person. Any attempt to assign
or transfer this Agreement or any portion thereof in violation of this
Section 10.13 shall be void.
10.14. Waiver of Jury Trial. EACH OF ASSIGNOR, ASSIGNEE AND SI BY THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL ACTION, PROCEEDING OR COUNTERCLAIM WITH RESPECT TO ANY MATTER WHATSOEVER ARISING OUT OF OR IN CONNECTION WITH OR RELATED TO THIS AGREEMENT OR THE OTHER RELATED DOCUMENTS OR THE ENFORCEMENT OF THIS AGREEMENT OR THEREOF.
* * * * *
The remainder of this page has been intentionally left blank.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement as of the date first above written.
FLUOROMETRIX CORPORATION
By: /s/ Joseph Qualitz Name: Joseph Qualitz Title: President |
SCIENTIFIC BIOPROCESSING, INC.
By: /s/ Helena R. Santos Name: Helena R. Santos Title: President |
SCIENTIFIC INDUSTRIES, INC.
By: /s/ Helena R. Santos Name: Helena R. Santos Title: President |
Exhibit A
Form of Escrow Agreement
Please see attached document.
Exhibit B
Form of Promissory Note
Please see attached document.
Exhibit C
Form of R&D Agreement
Please see attached document.
Exhibit D
Form of Non-Competition Agreement
Please see attached document.
Exhibit D-1
Form of Non-Competition Agreement
Please see attached document.
Exhibit E-1
Form of Legal Opinion
The following opinion (the "Opinion") will be subject to customary qualifications and exceptions. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Asset Purchase Agreement.
1. Assignor is a corporation duly incorporated and validly existing under the laws of Commonwealth of Massachusetts. Assignor has the corporate power to execute and deliver the Transaction Agreements (as defined in the Opinion) to which Assignor is a party and to perform its obligations thereunder.
2. The Transaction Agreements to which Assignor is a party have been duly authorized by all necessary corporate action on the part of Assignor and have been duly executed and delivered by Assignor.
3. The Transaction Agreements to which Assignor is a party constitute the legal, valid and binding obligations of Assignor, enforceable against Assignor in accordance with their respective terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors' rights and remedies generally and by equitable principles of general application.
4. The execution and delivery of the Transaction Agreements to which Assignor is a party and the performance by Assignor of their respective terms (a) will not breach or result in a violation of Assignor's certificate of incorporation or bylaws, (b) will not breach any judgment, order or decree of any domestic court or arbitrator, known to us, to which Assignor is a party or may be bound; and (c) will not constitute a material breach of the terms, conditions or provisions of, or constitute a default under, any of the Material Agreements (as defined in the Opinion).
5. Except as disclosed in the Agreement or the exhibits and schedules delivered in connection therewith, there is, to our current actual knowledge, no action, suit or proceeding pending against Assignor or its properties in any court or before any Governmental Authority which seeks to restrain, enjoin, prevent the consummation of, or otherwise challenge the Transaction Agreements to which Assignor is a party or any of the transactions contemplated thereby.
RESEARCH AND DEVELOPMENT AGREEMENT
THIS RESEARCH AND DEVELOPMENT AGREEMENT (this "Agreement") is made this 14th day of November 2011 (the "Agreement Date") by and between SCIENTIFIC BIOPROCESSING, INC., a Delaware corporation (the "Company"), a wholly owned subsidiary of SCIENTIFIC INDUSTRIES, INC., a Delaware corporation ("SI") and BIODOX R&D CORPORATION, a Massachusetts corporation (formerly Fluorometrix Corporation) ("Developer"). The Company and Developer are sometimes collectively referred to herein as the "parties" and each individually as a "party". Certain capitalized terms used, but not defined in the body of this Agreement, shall have the meanings given such terms in Section 14 of this Agreement.
WHEREAS, the Company is a party to an Asset Purchase Agreement of even date herewith with SI and Developer (the "APA"), an entity in which Dr. Joseph E. Qualitz ("Qualitz") is a promoter, officer, director and the owner of at least [__]% of its outstanding shares of voting stock and has extensive knowledge and expertise in the area of Bioprocessing and the patents and licenses as set forth in the APA; and
WHEREAS, the parties desire to enter into this Agreement pursuant to which Developer will develop certain Bioprocessing products and other related products on behalf of the Company under the terms and conditions set forth hereunder.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
1. Development Program; Payments; Reports.
1.1. Development Program. Under the "Development Program", Developer agrees to perform the research and development program for the exclusive benefit of the Company and the Company's Affiliates with respect to the list of Projects on Exhibit A during this Agreement (collectively, "Projects"), as may be updated and/or amended from time-to-time by the Company with the consent of the Developer, which consent may not be unreasonably withheld. The Projects shall be developed in accordance with detailed project deliverables to be supplied to Developer by the Company (the "Project Deliverables"). The initial set of Project Deliverables are attached as Exhibit B, and the Company shall supply updated sets of Project Deliverables, in each instance subject to the consent of the Developer, which consent may not be unreasonably withheld, on a quarterly basis thereafter at least five (5) days prior to such next quarter, with the first such quarter ending December 31, 2011, and which shall identify the project objectives for development by the end of the next quarter. All activities performed by or on behalf of the Company or Developer relating to the Development Program shall be for the exclusive benefit of the Company and the Company's Affiliates.
1.2. Development Efforts. Developer hereby agrees to complete the development of the Projects no later than the respective development completion dates set forth in the then-current Development Program as set forth on the applicable Exhibits attached hereto. Developer shall devote sufficient resources as is necessary to develop each Project and on the timetables set forth in the Development Program. Developer agrees to provide the services in connection with
the Development Program with the highest degree of professional care and skill, including by complying with any and all policies and standards of the Company. Developer shall possess the requisite skill, experience, knowledge, personnel, equipment and facilities necessary to develop the Projects and fulfill its other obligations under this Agreement. Developer shall comply with all applicable Laws in which Developer is performing services under the Development Program, act in the best interests of the Company, and cooperate in a reasonable manner with the Company in connection with the performance of the Development Program. Developer shall ensure that Developer and all Developer Persons are subject to no conflicting obligations with respect to discoveries, confidentiality or non-competition that could affect the development of Projects for the Company or the performance by Developer of its obligations under this Agreement. The Company agrees to reasonably cooperate with and, upon request, provide information and assistance to Developer as described in the Development Program.
1.3. Payments. In full consideration for the research and development work performed by Developer on behalf of the Company under this Agreement during the Term and for any related assignments or licenses received or granted after the date hereof, the Company shall pay to Developer a monthly fee equal to fourteen thousand dollars ($14,000) (the "Monthly Fee"). All payments shall be in US dollars. The Company shall remit payment to Developer no later than ten (10) days following each monthly accrual period. For a partial month worked in the event of an earlier termination of this Agreement, the base monthly fee shall be prorated based on the number of business days worked by Developer during the month divided by twenty (20). Notwithstanding the foregoing, the Company's obligation to pay the Monthly Fee is contingent upon delivery and acceptance of the Projects listed on Exhibit A in accordance Section 1.4.
1.4. Meetings; Reports.
(a) Personnel from each party will hold development review meetings at mutually convenient locations, or by video or teleconference, as may be reasonably requested from time-to-time by either of the parties, but in any event no less frequently than one (1) meeting per month during this Agreement. At such meetings, the parties shall review the progress of the development of each Project as against the Development Program and the Project Deliverables. In view of the development results, the Company may revise the Project Deliverables during the development review meetings with the consent of the Developer which may not be unreasonably withheld.
(b) Within fifteen (15) days following the end of each quarterly period during this Agreement, with the first such period being the quarter ended December 31, 2011 (each a "Reporting Period"), the Company will provide a "Progress Report" in writing to Developer as to the status of development of each Project listed for development in the immediately prior Progress Report. If, beginning with the Progress Report delivered with respect to the quarter ending March 31, 2012 and for each Progress Report delivered thereafter, the number of Projects that have not been completed and delivered to the Company ("Uncompleted Projects"), in the reasonable determination of the Company, is more than twenty-five percent (25%) of the total number of Projects to be completed by Developer and to be delivered to the Company by the end of the period covered by the Progress Report, the Developer shall devote its full resources to the completion of the
Uncompleted Projects and the Company may suspend its payment obligations under Section 1.3 hereof. If such Uncompleted Projects continue for two consecutive quarters, the Company will suspend its payment obligations under Section 1.3.
(c) If Developer causes the number of Uncompleted Projects to represent less than twenty-five percent (25%) of the total number of Projects to be completed by Developer and accepted by the Company (a "Cure"), which shall be in the Company's reasonable determination, the Company's payment obligations shall revive. The Company shall also deliver to Developer within ten (10) days of such Cure an amended set of Project Deliverables that will set forth the Project objectives for the remainder of the applicable quarter. If Developer fails to Cure the deficiency by the end of the second quarter following the end of the quarter during which the deficiency is noted, the Company may terminate this Agreement (except for Sections 2, 4.3, 6, 8 and 9) immediately upon written notice to Developer without any liability or other recourse to the Company.
(d) The Company shall also deliver a progress report within thirty (30) days following the end of each anniversary of the date of the Agreement (the "Annual Progress Report"). If the Annual Progress Report discloses any Uncompleted Projects, Developer will use its best efforts to complete and deliver to the Company the Uncompleted Project or Projects by the end of the thirty-day period thereafter subject to Section 1.4(e). If at the end of such thirty-day period the number of Uncompleted Projects represents:
(i) More than fifty percent (50%) of the total Projects set forth in the Annual Progress Report, the Company may effective upon delivery of written notice to Developer terminate this Agreement (except for Sections 2, 4.3, 6, 8 and 9) and the Developer shall pay to the Company fifty thousand dollars ($50,000); or
(ii) at least twenty-five percent (25%) but not more than fifty percent (50%) of the total Projects listed in the Annual Progress Report, the Developer shall be obligated to pay the Company twenty five thousand dollars ($25,000), which at Developer's option may be credited to the Company's future payment obligations of like amount, if any, under Section 1.3 hereof, and the Company will suspend its payment obligations until the completion percentage of the Uncompleted Projects is one-hundred percent (100%) upon which event the Company's payment obligations shall revive; or
(iii) less than twenty-five percent (25%) of the total Projects set forth in the Annual Progress Report, the monthly payment obligation pursuant to Section 1.3 hereof shall be suspended until the completion percentage is (i) at least ninety percent (90%) but less than one-hundred percent (100%) upon which event the Company's payment obligations shall revive at a rate equal to fifty (50%) percent of the Company's previous payment obligations or (ii) one-hundred percent (100%) upon which event the Company's payment obligations shall revive in full.
If Developer fails to cause the completion percentage of the Uncompleted
Projects to be one-hundred percent (100%) within ninety (90) days upon
delivery of the Annual Progress Report, the Company may effective upon
delivery of written notice to Developer terminate this Agreement
(except for Sections 2, 4.3, 6, 8 and 9)
(e) If the failure of Developer to satisfy a percentage of completion within any of the periods set forth in Section 1.4(d) is solely due to a delay or failure by the Company of its obligations hereunder or a force majeure factor beyond the control of the Developer or the unavailability of a key component, the thirty day period shall be extended by the period of the delay or failure.
(f) The determination by the Company as to the percent
completion of delivery of Projects hereunder shall be conclusive
unless within five (5) business days following transmittal of written
notice of such determination to Developer, the Company receives from
Developer written notice of Developer's disagreement as to such
determination. In such event, the parties shall use their best efforts
to resolve such disagreement. If a resolution is not effected by the
end of the tenth (10th) business day following confirmed delivery of
the notice of disagreement, the parties shall mutually appoint as an
independent expert to resolve such dispute a person with at least five
(5) years experience in research and development, and having a
reasonable familiarity with bioprocessing and bioprocess
instrumentation, to resolve such dispute. The expert shall resolve
all such disputes no later than the tenth business day after such
appointment by the parties. The parties shall cooperate in all
respects and in a prompt and diligence manner with any and all
requests for information by the expert. The parties acknowledge
and agree that the expert shall have full authority to resolve any
dispute under this Section 1.4, and all such determinations by the
expert shall be conclusive and binding on the parties upon receipt of
written notice of his, her or its determinations. The fees and
related costs of the expert shall be borne by the party whose
determination or objection was not sustained.
1.5. Supplies and Materials. All costs and other expenses incurred by Developer on behalf of the Company under the Development Program relating to prototypes, materials and other supplies shall be borne or reimbursed by the Company; provided, however, that Developer shall obtain the prior written consent of the Company before incurring any out-of-pocket cost or expense greater than one hundred dollars ($100), which consent shall not be unreasonably withheld. Developer agrees that the Company shall own all such materials and other supplies purchased by Developer on behalf of the Company during this Agreement. Developer shall submit monthly invoices under this subsection to the Company for reimbursement. The invoices shall contain all of the applicable third-party vendor invoices underlying the costs and expenses for which Developer seeks reimbursement. Developer shall only be permitted to seek reimbursement for the costs of the vendor invoices without surcharges of any kind. The Company shall have the right to deny any reimbursement in its sole discretion for any expense for which Developer does not provide the Company with the underlying vendor invoice in reasonable detail. The Company shall remit the permitted reimbursement within thirty (30) days upon receipt of each invoice.
1.6. Facility. Developer shall be responsible for acquiring and entering into a contract with respect to a laboratory facility, subject to the Company's prior written consent, which shall not be unreasonably withheld, within close proximity to the Technical Engineering Research Center at the University of Maryland Baltimore County and for the exclusive purpose of permitting Developer to meet its obligations under this Agreement. During this Agreement, the Company agrees to pay to Developer an amount up to one thousand dollars ($1,000) per month to be applied by Developer to a lease, rent or purchase of a facility (the "Facility
Reimbursement"). Developer may also apply the Facility Reimbursement against utilities and other direct expenses with respect to the facility, but excluding any brokerage or commission fees. Developer shall use such laboratory facility during the Term to meet its obligations under the Development Program. Developer shall submit monthly invoices to the Company with respect to the Facility Reimbursement. The Company shall remit the reimbursement within thirty (30) days upon receipt of each invoice.
1.7. Regulatory Approvals. The Company shall be responsible, at the Company's sole expense, for completing all regulatory registrations, approvals and submissions required in connection with the products or other deliverables created or generated under the Development Program. Developer agrees to notify the Company of any item that it believes may have regulatory registerability, and to cooperate with and, upon request, provide data, information and assistance to the Company in obtaining regulatory concurrence or approval for the sale and distribution of each product or other deliverables created or generated under the Development Program.
2. Inventions; Ownership.
2.1. Inventions; Disclosure. For purposes of this Agreement, "Inventions" shall include any and all inventions, ideas, improvements, modifications, processes, devices, products, know-how, ideas, technologies, computer hardware or software, concepts, designs, prototypes, samples, models, technical information, drawings, specifications or the like, whether or not patentable, that Developer or any Developer Person, alone or jointly with others, may conceive, invent, produce or reduce to practice during and with respect to a Patent Right (as defined in the APA) or Development Program, which: (i) relate to the Projects or a Patent Right; (ii) arise or result from any work performed under the Development Program within the scope of the related patent; or (iii) result from any access to Confidential Information or to any of the Company's memoranda, notes, records, drawings, sketches, models, maps, customer lists, research results, data, formulae, specifications, inventions, processes, equipment or other materials. Developer agrees to promptly disclose all Inventions to the Company in writing and in full detail. Developer shall keep accurate and complete records of all Inventions, which shall be the Company's exclusive property. All such Inventions and any information with respect thereto shall be the Company's Confidential Information within the meaning of, and shall be subject to, Section 6.
2.2. Ownership.
(a) Developer irrevocably agrees that all products and other deliverables that are created, developed or under-development under this Agreement shall be the sole and exclusive property of the Company. Further, Developer irrevocably agrees that all documentation, including all notes, summaries, reports, and analyses related thereto, developed or generated by Developer in connection with the Development Program, and all results and data resulting from the conduct of the Development Program shall be the sole and exclusive property of the Company except for documentation developed by a Consultant independent and beyond the scope of its engagement by the Developer. Developer agrees to use its best efforts to correspondingly limit the engagement of Consultants with respect to the Program Projects. Developer shall maintain accurate and adequate books and records in
connection with the performance of the Development Program and in reasonably sufficient detail and a scientific and professional manner appropriate for regulatory purposes. The Company shall have the right to inspect Developer's books and records pursuant to Section 5.
(b) Developer hereby irrevocably assigns and transfers to the Company and its successors and assigns, free and clear of all Liens, all of its right, title and interest throughout the world in and to all of the following (the "Assigned Rights"): (A) all Inventions; (B) all Intellectual Property Rights, whether patentable or not, that arise from or relate to the Inventions and/or the Projects (the "Related IP"); and (C) all rights to income derived from the Inventions and the Related IP, including the right to sue for infringement thereof and to recover all damages therefrom. Developer hereby waives any and all moral rights that Developer has in copyrights, including copyrighted works that exist now and will be made in the future in and to the Assigned Rights.
(c) Developer represents and covenants that all Developer Persons are and will be obligated under a binding written agreement to assign to Developer or the Company, free and clear of all Liens, all of their current and future right, title and interest throughout the world in and to the Assigned Rights with respect to the Projects and services and products developed or being researched or developed with respect thereto.
3. Rights and Duties of the Company.
3.1. Patent Applications and Maintenance. The Company shall have the exclusive right, but not the obligation, to file (in the name of the appropriate inventor or inventors) and prosecute patent, copyright or trademark applications world-wide with respect to any intellectual property constituting a part of the Assigned Rights. In the event the Company elects to file a patent application with respect to any of the Assigned Rights on behalf of itself, an Affiliate or licensor, it shall give prompt notice to Developer of each such application and keep Developer reasonably advised regarding its status and result. Developer agrees to execute, and to cause all Developer Persons to execute, without charge any foreign or domestic patent, copyright or trademark applications or assignments or similar documents related to patent, copyright or trademark prosecution or otherwise necessary or desirable, and to take all other actions reasonably requested by the Company or required by Law (as defined below) in order to file, prosecute, register, procure or assign rights under such applications, that relate to the above assignment and the obtaining of such patent, copyright or trademark rights, including providing reasonable cooperation and assistance to the Company in connection with such prosecution.
3.2. Infringement. The Company individually or on behalf of its Affiliates and/or licensors shall have the exclusive right, but not the obligation, to defend or institute litigation in connection with any alleged infringement relating to any patent or other intellectual property right arising from this Agreement at its own expense and solely for its own benefit. Developer agrees to cooperate with the Company as reasonably requested by the Company or required by Law in order to enforce any of such intellectual property right, at the Company's expense, in any such litigation or other dispute.
3.3. Authorization to the Company. In the event the Company is unable, after reasonable effort, to secure Developer's signature on any patent, copyright or other analogous
protection relating to the Assigned Rights for any reason whatsoever, including, without limitation, because of physical or other incapacity, Developer hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as its agent and attorney-in-fact, to act for and on its behalf and stead to execute and file any such application, applications or other documents and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of letters patent, copyright or other analogous rights or protections thereon with the same legal force and effect as if executed by Developer. Developer's obligation to assist the Company in obtaining and enforcing patents and copyrights for the Assigned Rights in any and all countries shall continue beyond the termination of Developer's relationship with the Company, but the Company shall compensate Developer at a reasonable rate after such termination for time actually spent by Developer at the Company's request on such assistance.
3.4. Limited License. The Company hereby grants to Developer a temporary, fully paid-up, royalty free, world-wide, non-exclusive, limited license (which shall not be sublicensable, assignable or transferable in any manner whatsoever) ("Limited License") solely to utilize the Assigned Rights and Trademarks/Copyrights (as defined below) as are reasonably necessary to enable Developer to fulfill its obligations on behalf of the Company under this Agreement. Developer shall not at any time, during or after the Term, do or cause to be done, anything that could adversely affect the Company's (i) rights in the Assigned Rights or (ii) rights in or the distinctiveness of the Trademarks/Copyrights. Developer acknowledges that the Company or the Company's Affiliates shall remain the sole and exclusive owner of the Assigned Rights and Trademarks/Copyrights. Nothing in this Agreement is intended to grant, or shall be deemed to have the effect of granting, any right to Developer or any other person to use any of the Assigned Rights or Trademarks/Copyrights other than pursuant to the Limited License. Any rights granted to Developer pursuant to this Section 3.4 shall terminate and be of no further force or effect upon the expiration or termination of this Agreement. "Trademarks/Copyrights" shall mean all trademarks (whether or not registered), trade names, brand names, service marks, slogans, logos, copyrights, and trade dress of the Company (together, in each case with any goodwill associated therewith) relating to the Projects or their components.
4. Representations; Warranties; Covenants.
4.1. Each party, on behalf of itself, represents and warrants to the other party that (i) such party is entering into this Agreement voluntarily and each has been represented by the counsel of its choosing in the negotiation and execution of this Agreement, (ii) such party has the power, authority and authorization to enter into and to perform all of the obligations under this Agreement, (iii) such party jointly drafted and negotiated this Agreement with the assistance of legal counsel for each party and that any ambiguity shall not be construed against any party as the drafter of the Agreement, and (iv) such party has read the entire Agreement, and is fully aware of its legal effect.
4.2. Developer hereby represents, warrants and covenants to the Company as follows: (i) Developer shall not in the course of its performance under the Development Program, either directly or indirectly, misappropriate any trade secrets or other Intellectual Property Rights of any third party, (ii) the products or other deliverables created or generated under the Development Program, and their Exploitation, do not and will not incorporate or use Intellectual Property Rights of a third party such
that the Company would need to obtain a license from such third party in order to avoid infringement of such third party's intellectual property, and (iii) Developer shall cooperate with the Company in responding to all requests for information from, and in making all required filings with, Governmental Authorities in all cases in matters relating to the Projects.
4.3. Developer hereby covenants and agrees to cause Qualitz to execute and deliver to the Company the Non-Competition Agreement in the form attached hereto as Exhibit C. Developer acknowledges and agrees that the effectiveness of this Agreement is, and binding nature of the Company's payment obligations hereunder are, contingent upon the execution and delivery to the Company of such non-competition agreement by Qualitz and his subsequent compliance with the terms and conditions therein.
5. Access to Facilities and Information. During the Term, and subject to applicable Law, Developer and Developer's Affiliates shall afford to the Company and its Affiliates reasonable access during normal business hours, upon reasonable notice and in such manner as will not unreasonably interfere with the conduct of their respective businesses, to the facilities, properties, books, records, documents and personnel having involvement with or relating to any Project, in order that the Company may have the opportunity to make such reasonable investigations as it shall desire of the Projects and such facilities, properties, books, records, documents and personnel. Developer shall, and shall cause its Affiliates and all Developer Persons to, cooperate with any such investigation. Developer shall maintain all such information and records created or generated under this Agreement for a period ending the later of (i) five (5) years from the termination or expiration of this Agreement or (ii) two (2) years after the date the records are no longer required by the Company for supporting any governmental approvals. Any Confidential Information (as defined below) of Developer received by the Company or its Affiliates as a result of such investigation shall be subject to the confidentiality obligations set forth in Section 6 of this Agreement.
6. Confidentiality.
6.1. For purposes of this Agreement, "Confidential Information" shall mean any and all any information of a confidential, non-public or proprietary nature pertaining to the Company, or to the business, operations, activities, products or services of the Company or any of its Affiliates (whether or not reduced to writing or marked as confidential, non-public or proprietary, and in any format or medium) which has been or is hereafter disclosed or made available by or on behalf of the Company to Developer with respect to or relating to (i) the Company's Intellectual Property Rights, (ii) comparable information that the Company may receive or has received from others who do business with it, (iii) such proprietary information relating to existing or contemplated products, services, designs, technology, processes, technical data, engineering, techniques, methodologies and concepts and any other information related thereto, (iv) such proprietary information relating to business plans, sales or marketing methods and customer lists or requirements, (v) the fact that the parties are engaged in a business relationship, and (vi) any other information or material relating to the business, operations or activities of the Company which is not generally known to others engaged in similar businesses or activities.
6.2. Developer shall hold Company's Confidential Information in strict confidence and agrees that Developer shall take all necessary steps during this Agreement, and in perpetuity
thereafter, to prevent the duplication or disclosure of any such Confidential Information, other than duplication by or disclosure to Developer Persons who, subject to the other provisions of this Agreement, must have access to such Confidential Information to perform such party's obligations hereunder, and who shall each treat such Confidential Information as provided herein. The obligations of Developer under this Section 6.2 will not apply to information that Developer can demonstrate (i) at the time of disclosure is generally available to the public or after disclosure becomes generally available to the public through no breach of agreement or other wrongful act, (ii) has been received from a third party without restriction on disclosure and without breach of agreement or other wrongful act, or (iii) is required to be disclosed by law or order of a court of competent jurisdiction or regulatory authority, provided that Developer shall furnish prompt written notice of such required disclosure and reasonably cooperate with the Company, at the Company's cost and expense, in any effort made by the Company to seek a protective order or other appropriate protection of its Confidential Information.
6.3. Upon the expiration or termination of this Agreement, Developer shall, upon request of the Company, promptly return to the Company or destroy all Confidential Information disclosed to it hereunder, including all copies thereof. If the Confidential Information is destroyed pursuant to this Section 6.3, Developer shall have an officer certify to the Company that the Confidential Information was destroyed.
6.4. Except as required by Law, Developer shall not, without the prior written approval of the Company, (i) use the name of the Company or any Affiliate of the other party in any publicity or advertising or (ii) disclose any terms or conditions of this Agreement.
7. Term and Termination.
7.1. Term. This Agreement shall be effective as of the Effective Date and, subject to earlier termination as provided herein, shall continue in force for a period of two (2) years from the Agreement Date (the "Initial Term"). The Company shall have three one (1) year options to extend the Term (each, a "Renewal Term", and together with the Initial Term, the "Term") upon not less than ninety (90) days advance written notice to Developer prior to the expiration of the end of the Term or then-current Renewal Term, as the case may be.
7.2. Termination.
(a) This Agreement may be terminated by either party:
(i) if the other party commits a material breach of any provision of
this Agreement and such breach continues uncured for a period of
thirty (30) days following written notice; or (ii) effective
immediately, if the other party files, or has filed against it, a
petition for voluntary or involuntary bankruptcy or pursuant to any
other insolvency Law or makes or seeks to make a general assignment
for the benefit of its creditors or applies for or consents to the
appointment of a trustee, receiver or custodian for its or a
substantial part of its property.
(b) This Agreement may be terminated by the Company effective immediately: (i) upon ninety (90) days written notice to Developer at any time subsequent to the Initial Term, in the event that the Company reasonably determines in its sole discretion that Developer subject to Section 1.4(e) has failed or will be unable to satisfactorily meet its
obligations under the Development Program
as set forth on Exhibit A; (ii) effective immediately, if Qualitz
fails to own at least 35% of the voting shares and beneficial
interests in Developer; (iii) effective immediately, if Qualitz
ceases to carry out and be responsible for the day-to-day business
operations of Developer unless the Company consents in writing to a
replacement who has similar skills, education, experience and
capabilities; (iv) effective immediately, if Qualitz becomes
disabled for any reason and for any length of time, unless the
Company consents in writing to a replacement who has similar
skills, education, experience and capabilities; or (v) upon thirty
(30) days written notice to Developer, in the event the Company
becomes a party to any claim, action or proceeding, or receives a
threatened claim, action or proceeding, relating to or arising
from the allegation that the products or other deliverables created
or generated under the Development Program, or their Exploitation
thereof, infringe, violate or misappropriate any Intellectual
Property Rights of any third party.
7.3. Effect of Termination. On the date of termination of this Agreement (and not limiting any other obligation or restriction as set forth herein), the Company shall pay to Developer its compensation as applicable then due and/or earned, but not yet paid through the date of termination.
8. Indemnification.
8.1. By Developer. Developer shall defend, indemnify and
hold harmless the Company and its Affiliates, and their respective
subsidiaries, directors, officers, employees, agents and
representatives (individually and collectively, the "Company
Indemnified Parties") from and against any and all damages,
liabilities, claims, costs, charges, judgments and expenses
(including reasonable attorneys' fees and expenses) (collectively
"Losses") that may be sustained, suffered or incurred by the Company
Indemnified Parties to the extent arising from or by reason of:
(i) the negligence or willful misconduct of Developer; (ii) the
breach by Developer of any warranty, representation, covenant or
agreement made by Developer in this Agreement; (iii) a claim of
any Lien made by a third party against the Assigned Rights; or
(iv) any claim, action or proceeding, or threatened claim, action
or proceeding, relating to or arising from the allegation that
the products or other deliverables created or generated under the
Development Program, or their Exploitation thereof, infringe, violate
or misappropriate any Intellectual Property Rights of any third party;
provided, however, that Developer shall not be responsible for any
Loss to the extent that such Loss arises out of or is related to
the negligence or willful misconduct of the Company.
8.2. By the Company. The Company shall defend, indemnify and hold harmless Developer and its Affiliates, and their respective subsidiaries, directors, officers, employees, agents and representatives (individually and collectively, the "Developer Indemnified Parties") from and against any and all Losses, that may be sustained, suffered or incurred by the Developer Indemnified Parties to the extent arising from or by reason of: (i) the negligence or willful misconduct of the Company; or (ii) the breach by the Company of any warranty, representation, covenant or agreement made by the Company in this Agreement. The Company shall not be responsible for any Loss to the extent that such Loss arises out of or is related to the negligence or willful misconduct of Developer.
8.3. Procedure for Indemnification. In the event of a claim subject to the indemnification provisions stated above, the indemnified party shall give prompt notice to indemnifying party, provided that the failure to give such notice shall not affect any indemnified party's rights to indemnification under this Agreement unless such failure shall materially prejudice the indemnifying party's ability to defend such claim. The indemnifying party (at its expense) shall assume the defense of any such claim against the indemnified party. If the indemnifying party fails to assume the defense of any such claim within thirty (30) days after it receives the above notice, the indemnified party may assume such defense with counsel of its choice and at the expense of the indemnifying party. The indemnified party shall have the right to participate in (but not control) the defense of any such claim defended by the indemnifying party hereunder and to retain its own counsel in connection with such claim, but the fees and expenses of such counsel shall be at the indemnified party's expense; provided, however, that the indemnifying party shall bear the fees and expenses as incurred of counsel to the indemnified party if representation of the indemnifying party and the indemnified party by the same counsel would be reasonably likely to create a conflict. No party shall be liable for any settlement by which it is effected without its written consent, which consent shall not be unreasonably withheld or delayed. The indemnified party shall fully cooperate with the indemnifying party in the defense of any matter subject to indemnification. The indemnifying party shall not, except with the written consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the person asserting such claim of an unconditional release from all liability with respect to such claim to all indemnified parties (i.e., the Company Indemnified Parties or Developer Indemnified Parties, as the case may be).
9. Non-Compete.
9.1. Definitions. For purposes of this Agreement:
(a) "Business" means the activities or businesses
developing, researching, producing, selling, distributing, licensing,
or marketing of any product, system, process or method which is or
relates to (i) a bioreactor system, disposable reactor, bag reactor,
fermentation system, shaker and other flash sensing system, including
but not limited to, CELLPHAST or CELLSTATION products within the
coverage of, or subject to, the patents, licenses and sublicenses held
by the Company, including those listed in the Schedules to this
Agreement or the APA; (ii) products, methods and processes related to
catalytic research instruments; or (iii) components, laboratory equipment
products or items or other biotech products or items which the Company,
SI, or any of their subsidiaries intends to develop, produce, sell or
license.
(b) "Non-Competition Area" means the United States, its territories and other jurisdictions which have granted or are considering the grant of an application for a patent with respect to a Business item to or on behalf of the Company, SI, their respective Affiliates or direct or indirect subsidiaries (collectively, the "SI Group").
(c) "Non-Competition Period" shall mean the period commencing on the Closing Date and ending on the fifth anniversary of the termination of this Agreement.
9.2. Covenant. Developer agrees that during the Non- Competition Period neither Developer nor any of its Affiliates or Developer Persons will, directly or indirectly:
(a) perform in the Non-Competition Area other than on behalf of a member of the SI Group services or otherwise act in any capacity for, or otherwise be engaged by or have any financial interest in or affiliation with, any individual corporation, partnership or any other person involved in or connected with any business which is the same or similar to the Business conducted by a member of the SI Group; provided, however, that nothing contained in this Paragraph 9.2(a) shall prevent Developer from owning or purchasing as an investment securities of any corporation whose securities are regularly traded on any national securities exchange or in the over-the-counter market which securities along with securities held at or after the purchase by Developer, including its Affiliates, at the time of the ownership or purchase by Developer is an amount which is less than 1% of the beneficial interests and voting interests outstanding of that corporation; or
(b) recruit, solicit or otherwise induce or influence any employee of a member of the SI Group or a sales agent, joint venturer, consultant, lessor, supplier, agent, buyer or any other person that was any of the foregoing or has or had during the Non-Competition Period or during the one year period initially preceding the commencement of the Non-Competition Period a business relationship with a member of the SI Group, to discontinue, reduce or adversely modify such employment, agency or business relationship with a SI Group member or employ or seek to employ or cause any person to employ or seek to employ any person or agent who is employed or retained by a member of SI Group.
9.3. Invention Applications. If, at any time, Developer, any Developer Affiliate, or anyone acting by or on behalf of (or as an assignee of) Developer or any Developer Affiliate, files an application for a patent, a utility model, an industrial design or a certificate of invention, and at least one claim of such patent application or other enforceable right involves or relates to a product, device, process, system or method to which the non-competition provisions of Section 9.2 of this Agreement apply (the "Invention Application"), then Developer or such other person (as applicable) shall be deemed to have assigned to the Company such Invention Application. The Invention Application shall include any continuation, continuation-in-part or divisional application thereof, any patent, utility model, industrial design and certificate of invention issuing thereon and any reissue, reexamination, renewal or extension thereof, and any patent of addition based on any such patent, all foreign counterparts of any of the foregoing, and all discoveries or inventions disclosed in any of the foregoing applications or patents, utility models, industrial designs and certificates of invention (whether or not embodied within any claim of an issued patent, utility model, industrial design or certificate of invention) and any related know-how. Such Invention Application shall become part of the Assigned Rights without payment of any additional consideration by the Company, and
(a) Developer agrees to execute and deliver (and to cause other persons having an interest in such Invention Application or related Patent Rights (as such term is defined in the Asset Purchase Agreement) or know-how to execute and deliver) such patent assignments and other instruments of transfer as the Company may reasonably request to accomplish the foregoing assignment of the Invention Application;
(b) Developer will provide to the Company a copy of
each Invention Application and prosecution history promptly after
the Invention Application is first filed;
and
(c) In view of the fact that a patent application may
be filed well after the end of the Term with respect to inventions
that are conceived and reduced to practice prior to the end of the
Term, Developer's obligations under this Section 9.3 shall survive
indefinitely.
10. Background License. Developer hereby grants a worldwide, perpetual, fully paid-up, royalty-free, non-exclusive right and license of Developer's Intellectual Property Rights to the Company and its customers and Affiliates to the extent reasonably necessary in order for the Company and its customers and Affiliates to Exploit any of the products or other deliverables created or generated under the Development Program.
11. Insurance. At all times during the Term, Developer at its cost shall procure and maintain with insurers reasonably acceptable to the Company on an occurrence (non-claims made) basis (i) workers' compensation insurance, (ii) comprehensive general liability insurance, including products/completed operations liability with a vendor's broad form endorsement, with a minimum liability coverage of One Million Dollars ($1,000,000) per occurrence, and (iii) employer's liability insurance for personal injury and property damage with a minimum liability coverage of One Million Dollars ($1,000,000). Developer shall provide certificates of insurance prior to the Agreement Date and from time to time thereafter upon the Company's request specifying the dates such coverage expires and providing further that no policy will be canceled or amended to reduce the amount of coverage or to eliminate coverage without thirty (30) days' prior written notice to the Company.
12. Consulting Agreements.
12.1. Development Work.
(a) Developer and the Company shall agree on a standard form of consulting agreement to be used by Developer for Developer's consultants during the Term which agreement will, inter alia, provide for the Company's ownership as provided in Section 2.2. Developer agrees that any material change to the standard form of consulting agreement after the initial approval of the standard form of consulting agreement by the Company will require the additional written consent of the Company. Developer further agrees that if, for any particular consultant, Developer proposes (A) not to use the standard form of consulting agreement or (B) to modify the standard form of consulting agreement, including by adding any new appendix, exhibit or other document to such consulting agreement or by modifying the standard form of any appendix, exhibit or other document constituting part of the standard form of consulting agreement, then such non-use, modification, addition or other change shall require the prior written consent of the Company. The parties agree that variations in the amount of compensation due to each consultant or the description of the work to be performed by each consultant shall not constitute material changes for which Developer shall need to obtain the Company's written consent.
(b) During the Term, Developer shall inform the Company if a consultant is to be retained or hired in furtherance of services or activities to be performed by Developer under this Agreement, and the identity of such consultant.
12.2. General. Developer agrees that it is and will be solely responsible for all costs and expenses under any current or future consulting agreement. Developer further represents and warrants that all current consulting agreements contain, and covenants and agrees that all future consulting agreements will contain, provisions assigning to Developer or the Company all intellectual property that is created, conceived, or developed hereunder in performance of such consulting agreements.
13. Use of Subcontractors and Agents. To the extent that Developer should at any time use a subcontractor or non-employee agent to perform any services, undertake any tasks or otherwise fulfill any obligations under this Agreement, Developer agrees to ensure that all representations and warranties and all covenants that would be applicable to Developer under this Agreement, if the Developer were to perform the service, undertake the task or fulfill the obligation itself, shall be binding on each such agent or subcontractor, and Developer shall guaranty the performance of each such agent or subcontractor. Developer shall cause the Company to be made a third party beneficiary of all relevant agreements with agents and subcontractors so that the Company shall have the right (but not the obligation) to enforce any such representation, warranty or covenant directly as against such agent or subcontractor. Developer shall maintain and make available to the Company upon request a list of all subcontractors and agents used in connection with the performance of Developer's obligations under this Agreement.
14. Definitions. In addition to the terms defined elsewhere in this Agreement, including the recitals, the following terms, when used herein, shall have the following meanings:
14.1. "Affiliate" shall mean a person that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified. For purposes of this definition, the terms "control," "controlled by" and "under common control with" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person and, in the case of an entity, shall require (i) in the case of a corporate entity, direct or indirect ownership of at least a majority of the securities having the right to vote for the election of directors, and (ii) in the case of a non-corporate entity, direct or indirect ownership of at least a majority of the equity interests with the power to direct the management and policies of such non-corporate entity.
14.2. "Bioprocessing" shall mean the items, products, systems, methods and processes employing the bioprocessing technology.
14.3. "Developer Persons" shall mean Qualitz, all Affiliates of Developer and the respective employees, agents, contractors, investigators, consultants, representatives and advisers of Developer and all Affiliates of Developer who are or will be involved in the performance by Developer of any of its obligations under this Agreement.
14.4. "Exploit" or "Exploitation" shall mean, with respect to any product, invention, system, process, intellectual property or asset, to disclose, manufacture, produce, import, use,
operate, research, design, develop, perform clinical or other testing, perform quality assurance testing, commercialize, revise, repair, register, maintain, modify, enhance, upgrade, prepare derivative works, seek regulatory concurrences or approvals, package, label, improve, formulate, export, transport, distribute, promote, market, advertise, sell, have sold, offer for sale or license such product, invention, intellectual property or asset, or to have another person do any of the same.
14.5. "Governmental Authority" shall mean any nation, territory or government, foreign, domestic or multinational, any state, local or other political subdivision thereof, and any bureau, court, tribunal, board, commission, department, agency or other entity exercising executive, legislative, judicial, regulatory or administrative functions of government, including all taxing authorities and all United States and foreign bodies and all other entities exercising regulatory authority over the products or other deliverables created or generated under the Development Program.
14.6. "Intellectual Property Rights" shall mean any and all proprietary rights, inventions, discoveries, trade secrets, patents, copyrights, trademarks, service marks, know-how, associated goodwill, moral rights, proprietary data or information, ideas, processes, formulas, source and object codes, programs, documentation, flow charts, design documents, other works of authorship, improvements or enhancements, discoveries and any other intellectual property right existing under the laws of any Governmental Authority.
14.7. "Law" shall mean any federal, state, local, municipal, international, multinational, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, order, edict, decree, rule, regulation, guideline, ruling requirement or other pronouncement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
14.8. "Lien" shall mean any interest, consensual or otherwise, in property, whether real, personal or mixed, or assets, tangible or intangible, securing an obligation owed to, or a claim by a third person, or otherwise evidencing an interest of a person other than the owner of the property or asset, whether such interest is based on Law or contract, and including any security interest, security title, lien, mortgage, recordation of abstract of judgment, deed of trust, deed to secure debt, encumbrance, restriction, charge, covenant, legal or equitable claim, exception, encroachment, easement, right of way, license, permit, incorporeal hereditament, pledge, conditional sale, option, trust (constructive or otherwise) or trust receipt or a lease, consignment or bailment for security purposes or other title exception affecting any property or asset.
14.9. "Person" shall mean an individual, corporation, partnership, limited partnership, limited liability company, unincorporated association, trust, joint venture, union or other organization or entity, including a Governmental Authority.
15. Miscellaneous.
15.1. Amendment and Waiver. This Agreement may not be amended or modified except by a written instrument signed by both parties. No failure or delay on the part of any
party in exercising any right hereunder will operate as a waiver of such right. No single or partial exercise of any right hereunder shall preclude any further exercise of such right or the exercise of any other right. No waiver of any breach of this Agreement shall operate as a continuing waiver against any further breach. No waiver of any right hereunder will be effective unless made in writing.
15.2. Independent Contractors. Developer is an independent contractor engaged by the Company to engage in the Development Program. Nothing in this Agreement shall make either party the legal representative, agent, employee, owner or partner of the other nor shall either party have the right or authority to assume, create or incur any liability or obligation of any kind, express or implied, against, in the name of or on behalf of, the other party.
15.3. No Third Party Beneficiaries. Except for Section 8 hereof, which is intended to create rights, benefits and remedies for the Company Indemnified Parties and the Developer Indemnified Parties, nothing herein, express or implied, is intended to or shall confer upon any person other than the parties hereto any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
15.4. Survival. All terms and provisions of this Agreement intended to be observed and performed after the termination hereof, including those set forth in Sections 2, 3, 4, 6, 8, 9, 10 and 11, shall survive such termination and continue, thereafter, in full force and effect.
15.5. Performance. Developer acknowledges that money damages alone will not adequately compensate the Company for Developer's breach of Sections 2, 4.3, 6 and 9, and, therefore, agrees that in the event of such breach or threatened breach, in addition to all other remedies available to the Company, at law, in equity or otherwise, the Company shall be entitled, if warranted, to an injunction restraining any such breach or threatened breach, or a decree of specific performance, without posting any bond or security. The remedy in this subsection is in addition to, and not in lieu of, any other rights or remedies the Company may have.
15.6. Construction. Unless the context of this Agreement clearly indicates otherwise: (i) the singular shall include the plural, the plural shall include the singular, and the part shall include the whole; (ii) references to one gender shall include all genders; (iii) "or" has the inclusive meaning frequently identified with the phrase "and/or"; (iv) "including" or "includes" has the inclusive meaning frequently identified with the phrase "including but not limited to"; and (v) references to "hereunder," "herein" and "hereof" relate to this Agreement as a whole; articles, sections, subsection, exhibit and schedule references are to this Agreement unless otherwise specified. Any reference herein to any law or agreement, including this Agreement, shall be deemed to include such law or agreement as it may be modified, varied, amended or supplemented from time to time. The headings contained in this Agreement are solely for reference purposes and shall not affect the meaning or interpretation of this Agreement.
15.7. Notices. Any notice required or permitted by this Agreement shall be in writing and shall be (i) delivered personally, effective on the date of delivery, (i) sent via an internationally recognized express international courier service, such as Federal Express or DHL, to be effective three (3) business days following deposit, or (iii) sent by facsimile to be effective on the date of confirmed transmission, provided that a confirmation copy is sent no later than the
next business day via an internationally recognized express international courier service, such as Federal Express or DHL. Notices shall be addressed to the party concerned at the address indicated below or at such other address as such party may subsequently designate by like notice from time-to-time:
(a) if to Developer, to:
BioDox R&D Corporation
24 Timber Edge Road
Stow, Massachusetts 01775
Attention: Dr. Joseph E. Qualitz, President
Telecopier No.: ___________
(b) if to the Company, to:
Scientific Bioprocessing, Inc.
70 Orville Drive
Bohemia, New York 11716
Attention: Helena R. Santos, President
Telecopier No.: (631) 567-5896
with a required copy to:
Reitler Kailas & Rosenblatt LLC
885 Third Avenue, 20th Floor
New York, New York 10022
Attention: Leo Silverstein
Telecopier No.: (212) 371-5500
15.8. Expenses. Each party hereto shall pay its own expenses in connection with the transactions contemplated by this Agreement, whether or not they are completed. In the event of any conflict between this provision and the indemnification or termination provisions of this Agreement, the indemnification or termination provisions, as the case may be, shall control.
15.9. Entire Agreement. This Agreement constitutes the entire agreement between and among the parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, whether written or oral, between the parties in connection with such subject matter.
15.10. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the substantive law of the State of New York without giving effect to any conflict-of-law provision. The parties hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the state and federal courts located in New York for any actions, suits or proceedings arising out of or relating to this Agreement (and each party agrees not to commence any action, suit or proceeding relating thereto except in such courts), and further agree that service of any process, summons, notice or document in accordance with Section 15.7 hereof shall be effective service of process for any action, suit or proceeding brought against the parties in any such court. The parties hereby irrevocably and unconditionally
waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement in the state and federal courts located in New York, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
15.11. Interpretation. When reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement, unless otherwise indicated. References to Sections include subsections, which are part of the related Section (e.g., a section numbered "Section 1.4(a)" would be part of "Section 1.4" and references to "Section 1.4" would also refer to material contained in the subsection described as "Section 1.4(a)"). The recitals hereto constitute an integral part of this Agreement. The table of contents and headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa. Any reference to Law shall be deemed to refer to such Law as such Law may be in effect from time to time, unless the context requires otherwise. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The term "or" shall have the inclusive meaning frequently identified with the phrase "and/or." No summary of this Agreement prepared by any party shall affect the meaning or interpretation of this Agreement.
15.12. Modification. It is the intention of the parties that this Agreement be enforced in accordance with its specific terms. However, if it should for some reason be contrary to public policy to effectuate the intentions of the parties in interpreting this Agreement, the parties have agreed as follows:
(a) In the event that any court to which a dispute is submitted determines that any provision of this Agreement is invalid or unenforceable by reason of its extending for too great a period of time or over too large a geographic area or over too great a range of activities, the parties agree that the court shall have the power to reduce the scope, duration, or geographic area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the decision may be appealed.
(b) If the court shall determine that any provision of this Agreement is invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the other provisions of this Agreement shall not be affected thereby. Any invalid, illegal or unenforceable provision of this Agreement shall be severable, and after any such severance, all other provisions of this Agreement shall remain in full force and effect. In all such cases, the parties shall use their reasonable best efforts to substitute a valid, legal and enforceable provision which, insofar as practicable, implements the original purposes and intents of this Agreement.
15.13. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.
15.14. Counterparts and Facsimile Signatures. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party and delivered to the other party, it being understood that all parties need not sign the same counterpart. Facsimile execution and delivery of this Agreement by any of the parties shall be legal, valid and binding execution and delivery of such document for all purposes.
15.15. Dispute Resolution. Except for disputes under Section 1.4, which shall be resolved in accordance with Section 1.4(f), any party may give the other party notice of any dispute not resolved in the normal course of business. Within five (5) business days after delivery of that notice, the receiving party will provide a written response. Within five business (5) days after delivery of the receiving party's notice, executives of the parties who have authority to resolve the dispute will meet to attempt to resolve the dispute. All reasonable requests for information will be honored. If the matter has not been resolved within fifteen (15) business days after the disputing party's initial notice, the dispute shall be resolved exclusively by final and binding arbitration administered by the American Arbitration Association ("AAA") and conducted before a single arbitrator pursuant to the current expedited procedures applicable to the then-current commercial arbitration rules of the AAA. The place of arbitration shall be New York, New York. Any award rendered by the arbitrator shall be final and binding upon the parties, and judgment upon any such award rendered may be entered in any court having jurisdiction. Each party shall pay its own expenses of arbitration, and the expenses of the arbitrator shall be equally shared between the Company and Developer unless the arbitrator assesses as a part of his or her award all or any part of the arbitration expenses of a party (including reasonable attorneys' fees) against the other party.
15.16. No Assignment by Developer. This Agreement is personal to Developer, and Developer shall not assign, transfer, delegate or otherwise dispose of, whether voluntarily or involuntarily, by operation of law or otherwise, this Agreement or any of its rights or obligations under this Agreement without the prior written consent of the Company. Any purported assignment, sale, transfer, delegation or other disposition by Developer, except as permitted herein, shall be null and void. The Company may freely assign this Agreement, in whole or in part, with or without notice to or consent of the Developer. This Agreement, including all rights and obligations hereunder, will be binding upon the parties and their respective permitted successors and assigns, and all such permitted successors and/or assigns shall execute an acknowledgement in writing agreeing to be fully bound by the terms and conditions of this Agreement prior to such assignment.
15.17. Waiver of Jury Trial. EACH OF DEVELOPER AND THE COMPANY BY THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL ACTION, PROCEEDING OR COUNTERCLAIM WITH RESPECT TO ANY MATTER WHATSOEVER ARISING OUT OF OR IN CONNECTION WITH OR RELATED TO THIS AGREEMENT OR THE ENFORCEMENT OF THIS AGREEMENT OR THEREOF.
<apge>
* * * * *
The remainder of this page has been intentionally left blank.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement as of the date first above written.
BIODOX R&D CORPORATION
By: /s/ Joseph Qualitz _______________________ Name: Joseph E. Qualitz Title: President |
SCIENTIFIC BIOPROCESSING, INC.
By: /s/ Helena R. Santos _________________________ Name: Helena R. Santos Title: President |
ACKNOWLEDGED BY:
/s/ Joseph Qualitz ____________________________ Dr. Joseph E. Qualitz |
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED, UNLESS REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR UPON DELIVERY TO THE ISSUER OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THE NOTE THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS PURSUANT TO AVAILABLE EXEMPTIONS THEREFROM. THE TRANSFER OF THIS NOTE IS RESTRICTED PURSUANT TO THE TERMS HEREOF.
SCIENTIFIC INDUSTRIES INC.
PROMISSORY NOTE
$230,000 Bohemia, New York November 14, 2011
Scientific Industries Inc., a Delaware corporation (the "Company"), in consideration of the release in the form of Exhibit A hereto of the Company and Fluorometrix Corporation, a Massachusetts corporation, and other valuable considerations hereby promises unconditionally to pay to the University of Maryland, Baltimore County, or its permitted transferees or assigns (collectively, the "Holder"), in immediately available and lawful money of the United States of America ("Dollars" or "$"), the principal amount of Two Hundred Thirty Thousand Dollars ($230,000) (the "Principal"), plus any accrued and unpaid Interest thereon (as such terms are defined below).
1. CERTAIN DEFINITIONS; CERTAIN INTERPRETATIONS.
1.1. Certain Definitions. As used herein, the following terms shall have the following meanings:
"Business Day" means any day that is not a Saturday, Sunday or a legal holiday in the State of New York.
"Event of Default" shall have the meaning assigned to such term in Section 3.
"Holder" shall have the meaning assigned to such term in the Preamble.
"Interest" shall have the meaning assigned to such term in
Section 2.1.
"Issue Date" means the first date written above, which is the date of execution and issuance of this Note.
"Person" means any individual, corporation, limited liability company, partnership, limited partnership, limited liability partnership, firm, joint venture, association, joint stock company, trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Securities Act" means the Securities Act of 1933, as amended.
1.2. Certain Interpretations. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation." The word "will" shall be construed
to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as
referring to such agreement, instrument or other document as from time
to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set
forth herein), (b) any reference to any law, rule or regulation herein
shall be construed as referring to any amendment or modification of such
law, rule or regulation, (c) any reference herein to any Person shall
be construed to include such Person's permitted successors and assigns,
(d) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Note in its entirety and not
to any particular provision hereof, (e) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles
and Sections of, and Exhibits and Schedules to, this Note, except as
otherwise expressly provided, and (f) the words "asset" and "property"
shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
2. INTEREST; PAYMENT
2.1. Interest. Interest on the unpaid Principal ("Interest") during the period from the Issue Date shall accrue at 3.25% per annum.
2.2. Payment. Principal and Interest shall be payable in thirty-six consecutive 30-day installments, each installment in the amount of $6,714.085, with the principal and interest components set forth on Schedule A hereto with the first installment due on the thirtieth day following the Issue Date. The Company may prepay the Note in whole or in part without penalty.
2.3. Location and Extension of Time for Repayments. All
payments (including any prepayments) of Principal, Interest and other
amounts due and payable by the Company pursuant to this Note shall be
paid to the Holder at such Holder's address for notice pursuant to
Section 5.8. If the outstanding installment of Principal and Interest
become due and payable on any day other than a Business Day, the payment
date thereof shall be automatically extended to the next succeeding
Business Day, and such payable amounts shall automatically be added the
Interest which shall have accrued during such extension period at the
rate per annum herein specified.
3. EVENTS OF DEFAULT.
If one or more of the following events shall have occurred during the date and be continuing (each, an "Event of Default"):
(a) the failure by the Company to pay an installment of Principal and accrued and unpaid interest on this Note within five business days of its due date;
(b) the Company shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall take any corporate action to authorize any of the foregoing; or
(c) an involuntary case or other proceeding shall be commenced against the Company seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed for a period of sixty (60) days; or an order for relief shall be entered against the Company under the federal bankruptcy laws as now or hereafter in effect.
then, and in each and every such Event of Default, the Holder may, by written notice to the Company, declare immediately due and payable in full the unpaid principal of this, along with the unpaid interest in installments which were due on or prior to the date of payment in full of the principal without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company; provided, however, that in the case of any of the Events of Default specified in clauses (b) or (c) above, without any notice to the Company or any other act by the Holder or the other Holders, principal of this Note shall become immediately due and payable in full along with the unpaid interest in installments which were due on or prior to the date of payment in full of the principal without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company and without giving rise to the automatic conversion of this Note.
4. REPLACEMENT OF THE NOTE.
Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Note, and in case of loss, theft or destruction, of indemnity reasonably satisfactory to it (with or without requirement of a surety bond in the Company's sole discretion), and upon reimbursement to the Company of all reasonable expenses incidental thereto, and (if mutilated) upon surrender and cancellation of this Note, the Company shall make and deliver to the Holder a new promissory note of like tenor in lieu of this Note. Any replacement promissory note made and delivered in accordance with this Section 4 shall be dated
as of the date hereof.
5. MISCELLANEOUS.
5.1. Survival. All agreements and covenants contained in this Note shall survive the execution hereof and shall remain in full force and effect until the earlier to occur of the payment in full of all outstanding Principal and Interest, and any other amounts due and payable, under this Note.
5.2. Assignment. The Holder may not assign or otherwise dispose of this Note or the rights and obligations hereunder (including by operation of law) without the prior written consent of the Company which consent may not be unreasonably withheld. Notwithstanding anything to the contrary in the foregoing, this Note may not be assigned or otherwise disposed of by the Holder unless (i) registered under the Securities Act and applicable state securities laws or (ii) the Company receives an opinion of counsel to the proposed transferor in form and substance satisfactory to the Company, to the effect that such proposed assignment or other disposition is exempt from the registration requirements of the Securities Act and applicable state securities laws. Any instrument purporting to make an assignment or other disposition in violation of this Section 5.2 shall be void.
5.3. Benefits of Note. The terms and provisions of this Note shall be binding upon the successors, assigns, heirs, executors and administrators of the Company and the Holder and shall inure to the benefit of, and be enforceable by, each Person who shall be a registered holder of this Note from time to time. The Holder shall have no rights as a stockholder of the Company solely by virtue of the ownership of this Note.
5.4. Severability. In case any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
5.5. Further Assurances. The Holder agrees to execute such other documents, instruments, agreements and consents, and take such other actions as may be reasonably requested by the Company hereto to effectuate the purposes of this Note.
5.6. Amendment and Waiver. The terms and provisions of this Note may only be modified, amended or waived in writing signed by the Company and the Holder. All modifications, amendments, waivers and consents shall be effective only in the specific instance for the purpose for which given.
5.7. Delays or Omissions. No delay by the Holder or the Holder's agents in exercising any powers or rights hereunder shall operate as a waiver of such power or right, nor shall any single or partial exercise of any power or right preclude other or further exercise thereof, or the exercise of any other power or right hereunder or otherwise.
5.8. Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b)
when sent by confirmed facsimile transmission if sent during normal business hours of the recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent as follows:
If to the Company:
Scientific Industries, Inc.
70 Orville Drive
Bohemia, New York 11716
Attention: Helena R. Santos
Telecopy: (631) 567-5896
With a copy to:
Reitler Kailas & Rosenblatt LLC
885 Third Avenue, 20th Floor
New York, New York 10022
Attention: Leo Silverstein, Esq.
Facsimile: (212) 371-5500
If to Holder:
University of Maryland Baltimore County
Office of Technology Development
5523 Research Park Drive, Suit 310
Baltimore, MD 21228
ATTN Wendy Martin, Director, Technology
Attention: Director
Facsimile: 410-455-1130
or, to such other address or facsimile number as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith.
5.9. Titles and Subtitles. The titles of the sections and subsections of this Note are for convenience of reference only and are not to be considered in construing this Note.
5.10. Governing Law. This Note shall be construed in accordance with, and governed by, the laws of the State of Maryland (without giving effect to conflict of laws principles).
5.11. Consent to Exclusive Jurisdiction and Service of Process. The Company and the Holder each hereby irrevocably and unconditionally submits to the jurisdiction of the courts of the State of Maryland and of the Federal courts sitting in Baltimore County in the District of Maryland in any action or proceeding directly or indirectly arising out of or relating to this Note or the transactions contemplated hereby (whether based in contract, tort, equity or any other theory). The Company and the Holder each agrees that all actions or proceedings arising out of or relating to this Note must be litigated exclusively in any such court that sits in Baltimore County, and accordingly, each party irrevocably waives any objection which he or it may now or hereafter have to the laying of the venue of any such action or proceeding in any such court. The Company and the Holder each further irrevocably consents to service of process in the manner provided for notices in Section 5.8. Nothing in this Note will affect the right of the Company or the Holder to serve process in any other manner permitted by law.
IN WITNESS WHEREOF, the Company has caused its duly authorized representative to execute this Note, and the Company has caused this Note to be issued, each as of the date first set forth above.
SCIENTIFIC INDUSTRIES, INC.
By: /s/ Helena R. Santos ________________________ Name: Helena R. Santos Title: President |
NON-COMPETITION AGREEMENT
THIS AGREEMENT dated as of November 14, 2011 (the "Agreement") by and between SCIENTIFIC BIOPROCESSING, INC., a Delaware corporation (the "Company"), and SCIENTIFIC INDUSTRIES, INC., ("SI") which owns the outstanding capital stock of the Company, with the principal office of both at 70 Orville Drive, Bohemia, NY 11716 and JOSEPH E. QUALITZ who resides at [_____________________] ("Qualitz").
WHEREAS, the Company is acquiring on this date by assignment from BioDox R&D Corporation, formerly Fluorometrix Corporation, a Massachusetts corporation ("Assignor") in accordance with the Asset Purchase Agreement, dated November 14, 2011 between the Company and the Assignor, the rights to the Fluorometrix name, trademark and website, and the licenses and sublicenses owned or held by Assignor including those related to patents listed in the Schedules to the Asset Purchase Agreement (the "Purchase Agreement") including the Exclusive License Agreement with the University of Maryland Baltimore County, dated January 31, 2001 as amended through the date hereof (collectively, the "Licenses"), all of which together constitute substantially all the assets of Assignor;
WHEREAS, as a condition to the acquisition the Company is to enter into a Research and Development Agreement with Assignor for the purpose of attempting to exploit the Rights and properties acquired (the "R&D Agreement") and in furtherance thereof, Qualitz an officer, director and an employee of Assignor is to execute and deliver this Non-Competition Agreement.NOW, THEREFORE, it is hereby agreed as follows:
1. In order to induce the Company and SI to execute and deliver the Purchase Agreement and for the Company to execute and deliver the R&D Agreement, Qualitz hereby agrees that:
(a). During the "Non-Competition Period" meaning the period commencing on the Closing Date as defined in the Asset Purchase Agreement and ending on the fifth anniversary of the termination of the R&D Agreement, Qualitz shall not within the "Non-Competition Area," other than pursuant to the R&D Agreement: (i) perform services or otherwise act in any capacity (including without limitation as an employee, independent contractor, officer, director or consultant) for, or otherwise be engaged by or have any financial interest in or affiliation with, any individual corporation, partnership or any other entity involved in, or which involves or relates to, one or more of the Competitive Activities (as defined in Section 1(b) below); (ii) perform services (including without limitation as an employee, independent contractor, officer, director or consultant) for, or otherwise be engaged by or have any financial interest in or affiliation with, any individual corporation, partnership or any other entity involved in Competitive Activities ("Competitor Entity"); or (iii) own, along with his affiliates, including parents, siblings and members of their families, directly or indirectly, more than 2% in the aggregate of the outstanding equity interests of any Competitor Entity. Nothing contained in this Paragraph 1(a) shall prevent Qualitz from being an officer, director, employee or partner of, or owning more than 2% of the outstanding equity interests in, a lessor or sublessor of a facility of
which the Company is the lessee or sublessee at the time of the purchase;
(b). "Competitive Activities" shall mean activities or businesses developing, researching, producing, selling, distributing, licensing, or marketing of any product, system, process or method which is or relates to (i) a bioreactor system, disposable reactor, bag reactor, fermentation system, shaker and other flash sensing system, including, but not limited to, CELLPHAST or CELLSTATION products within the coverage of, or subject to, the patents, licenses and sublicenses held by the Company, including those listed in the Schedules to the Purchase Agreement or the R&D Agreement; (ii) products, methods and processes related to catalytic research instruments; or (iii) components, laboratory equipment products or items or other biotech products or items which the Company during the Non-Competition Period has advised Qualitz that the Company, SI or any of their subsidiaries intends to develop, produce, sell or license;
(c). "Restricted Area" shall mean the United States and any other nation in which the Company, SI or a subsidiary of the Company or of SI holds a patent or license or has an outstanding application for a patent covering a product, system, process or method, which covers, or which to the knowledge of Qualitz relates to, or is to relate to, a Competitive Activity;
(d). During the Non-Competition Period neither Qualitz nor any of his affiliates will, directly or indirectly: (i) recruit, solicit or otherwise induce or influence any employee of the Company, SI or a direct or indirect subsidiary of SI (collectively, the "SI Group") or a sales agent, joint venturer, lessor, supplier, agent, buyer or any other person who or which was an employee of or engaged by a SI Group member or has or had, during the Non-Competition Period or during the one year period initially preceding the commencement of the Non- Competition Period, a business relationship with a member of the SI Group, to discontinue, reduce or adversely modify such employment, agency or business relationship with a SI Group member; or (ii) employ or seek to employ or cause any person to employ or seek to employ any person or agent who is employed or retained by a member of the SI Group.
2. Qualitz acknowledges and agrees that the Company, SI and their respective affiliates would be damaged irreparably in the event any of the provisions of this Agreement is not performed in accordance with its specific terms or otherwise is breached. Accordingly, Qualitz agrees that the Company or SI shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the matter, without being required to secure a bond, in addition to any other remedy to which it may be entitled, at law or in equity.
3. If the final judgment of a court of competent jurisdiction declares that any term or provision of Section 1 above, is invalid or unenforceable, the parties to this Agreement agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.
4. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
5. Each party submits exclusively to the jurisdiction of any state or federal court sitting in the Borough of Manhattan, New York in any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court. Each party waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of the other party with respect thereto. A party may make service on the other party by sending or delivering a copy of the process to the party to be served at the address set forth in the first paragraph of this Agreement.
SCIENTIFIC BIOPROCESSING, INC.
By: /s/ Helena R. Santos ____________________________ Helena R. Santos, President SCIENTIFIC INDUSTRIES, INC. JOSEPH E. QUALITZ By: s/s Helena R. Santos /s/ Joseph Qualitz ____________________________ ___________________________ Helena R. Santos, President |