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):
April 28, 2021
_________________________________________________
SCIENTIFIC INDUSTRIES, INC.
_________________________________________________
(Exact
name of registrant as specified in its charter)
|
Delaware
|
|
000-6658
|
|
04-2217279
|
|
(State
or other Jurisdiction)
|
|
(Commission
File Number)
|
|
(IRS
Employer No.)
|
80 Orville Drive
Bohemia, New York 11716
__________________________________________________
(Address
of principal executive offices)
(631) 567-4700
__________________________________________________
(Registrant's
telephone number, including area code)
Not Applicable
__________________________________________________
(Former
name or former address, if changed since last report)
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF
ASSETS
ITEM 3.02. UNREGISTERED SALE OF EQUITY SECURITIES
On April 28, 2021, Scientific Bioprocessing Holdings, Inc.
(“Bioprocessing”), a wholly-owned subsidiary of
Scientific Industries, Inc. (the “Company), entered into an
Agreement on the Sale and Transfer of all Shares in aquila biolabs
GMBH (the “Acquisition Agreement”) with each of the
owners (the “Sellers”) of the share capital of aquila
biolabs GMBH (“aquila”) pursuant to which Bioprocessing
agreed to purchase and the Sellers agreed to sell all the
outstanding share capital of aquila (the
“Acquisition”). The closing of the purchase and sale
(the “Closing”) occurred on April 29, 2021. The
aggregate consideration paid for the share capital of aquila was
€ 6,499,063 (US$7,880,114). The
Acquisition Agreement contains customary conditions,
representations, warranties, indemnities and covenants by, among,
and for the benefit of the parties.
Immediately following the Closing, aquila entered into new
Director’s Service Agreements (the “Service
Agreements”) with each of Jens Bayer, Konrad Herzog, David
Frank and Daniel Grünes in their capacities as Managing
Directors of aquila. The Managing Directors will conduct the
business of aquila and report to aquila’s Supervisory Board,
the members of which are Helena Santos, John Moore and Reinhard
Vogt. In 2021, each Managing Director will receive a salary of
€105,000, as well as a guaranteed bonus of €45,000. In
2022, each Managing Director will receive a salary of
€105,000 and a bonus of €45,000, subject to the
achievement by aquila of certain targets.
A copy
of the Acquisition Agreement and the form of Service Agreement are
attached hereto as exhibits. This summary description does not
purport to be complete and is qualified in its entirety by
reference to the Acquisition Agreement and the form of Service
Agreement which are incorporated herein by reference.
In
connection with the Acquisition, on April 28, 2021, the Company
entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with certain investors (the
“Investors”) pursuant to which the Company sold, and
the Investors purchased, an aggregate of 1,595,880 shares of common
stock (the “Shares”) and warrants (the
“Warrants”) to purchase up to an additional 797,940
shares of common stock (the “Warrant Shares”), at an
offering price of $4.75 per share, for a total consideration of
$7,580,430. The closing under the Purchase Agreement occurred on
April 29, 2021, and the Company contributed the net proceeds from
the sale of the securities to Bioprocessing for application to the
purchase price under the Acquisition Agreement.
Each
Warrant is exercisable for the purchase of one share of the
Company’s common stock at an exercise price of $9.50 per
share. The Warrants are immediately exercisable and expire five
years from their date of issuance. If at any time commencing 12
months from the Closing Date, but before the expiration of the
Warrant, the volume weighted average pricing of the Company’s
common stock exceeds $19.00 (subject to adjustment for forward and
reverse stock splits, recapitalizations, stock dividends and the
like) for each of thirty consecutive trading days, then the Company
may, at any time in its sole discretion, call for the exercise of
the Warrants, in their entirety.
The
Company also entered into a Registration Rights Agreement dated
April 29, 2021 (the “Registration Rights Agreement”)
with the Investors, pursuant to which the Company has agreed to
prepare and file with the Securities and Exchange Commission a
registration statement so as to permit the registered resale of the
Shares and the Warrant Shares. The Company shall use its best
efforts to have such registration statement declared effective for
a period of one (1) year following the initial date of
effectiveness. In addition, the holders of at least twenty per cent
(20%) of the Shares and Warrant Shares shall have the right,
exercisable at any time prior to the fifth (5th ) anniversary of
the Closing Date, to request that the Company file with the
Securities and Exchange Commission a registration statement for all
or part of the Shares and Warrant Shares beneficially owned by the
holders of such securities.
The
sale was made in a private placement transaction, pursuant to the
exemption provided by Section 4(2) of the Securities Act and
certain rules and regulations promulgated under that section and
pursuant to exemptions under state securities laws.
This
Current Report on Form 8-K is neither an offer to sell nor the
solicitation of an offer to buy the Shares, Warrant Shares or any
other securities and shall not constitute an offer, solicitation or
sale in any jurisdiction in which such offer, solicitation or sale
is unlawful.
A copy
of the Purchase Agreement and the Registration Rights Agreement and
the form of Warrant are attached hereto as exhibits. This summary
description does not purport to be complete and is qualified in its
entirety by reference to the Purchase Agreement and the
Registration Rights Agreement and the form of Warrant which are
incorporated herein by reference.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION
OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS
As of
April 29, 2021, the Board of Directors of the Company appointed Dr.
Jürgen Schumacher as a Class A Director.
Dr.
Schumacher, age 67, is currently a private investor in various
startups and growth phase technology companies.
ITEM 9.01 Financial Statements and Exhibits
(a)
Financial Statements of Business Accquired
The
Company intends to file the financial statements of the business
acquired under cover of a Form 8-K/A no later than 71 calendar days
after the date this report was required to be
filed.
(b)
Pro Forma Financial Information
The
Company intends to file pro forma financial information under cover
of Form 8-K/A no later rhan 71 calendar days after the date
this report was required to be filed.
(c)
Exhibits
|
|
Form of
Warrant
|
|
|
Registration
Rights Agreement by and among the Company and the
Investors
|
|
|
Acquisition
Agreement by and among the Company and the Sellers
|
|
|
Form of
Service Agreement
|
|
|
Purchase
Agreement by and among the Company and the Investors
|
|
|
Press
Release with respect to the Acquisition dated April 29,
2021
|
|
|
Press
Release with respect to appointment of Dr. Schumacher as a
Director
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
Date: April 30, 2021
|
By:
|
/s/ Helena R. Santos
|
|
|
|
|
Helena R. Santos,
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE
STATE SECURITIES LAWS.
|
No. W__
|
Warrant to Purchase
|
|
|
Shares of Common Stock
|
|
|
|
|
|
Dated: April __, 2021
|
SCIENTIFIC INDUSTRIES, INC.
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
This
certifies that, for good and valuable consideration, SCIENTIFIC
INDUSTRIES, INC., a Delaware corporation (the “Company”), grants to
_____________ (the “Warrantholder”), the
right to subscribe for and purchase from the Company _____ Shares
(the “Warrant
Shares”) at a per Share price equal to $9.50 per
Share, subject to adjustment as provided herein (the
“Exercise
Price”). This Warrant shall be exercisable as set
forth below and shall expire, without notice, at 5:00 p.m., New
York City time, on April__, 2026 (the “Expiration Date”). The
Exercise Price and the number of Warrant Shares are subject to
adjustment from time to time as provided in Section 5. This Warrant is
issued in connection with that certain Securities Purchase
Agreement, dated as of April __, 2021 (the “Purchase Agreement”), by
and among the Company and the purchasers named
therein.
For
purposes of this Warrant, the following defined terms shall have
the following meanings:
“Affiliate” means any
Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act of 1933, as amended.
“Business Day” means any
day on which the Trading Markets are open for
business.
“Exercise Date” means the
date on which the Exercise Notice and Warrant is delivered to the
Company.
“Fundamental Transaction”
means any of the following (i) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to
which all or substantially all of the holders of Common Stock are
permitted to tender or exchange their shares for other securities,
cash or property. (ii) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for
other securities, cash or property (other than as a result of a
subdivision or combination of shares of Common Stock covered by
Section 5.1 hereof,
or a Distribution covered by Section 5.2 hereof). (iii) any
sale, lease, license, transfer, conveyance or other disposition of
all or substantially all of the assets of the Company, in one or a
series of related transactions. (iv) any reorganization,
consolidation, merger, demerger or sale of shares of the Company
where the holders of the Company’s outstanding shares as of
immediately before the transaction (or series of related
transactions) beneficially own less than a majority by voting power
of the outstanding shares of the surviving or successor entity as
of immediately after the transaction. or (v) any
“person” (together with his, her or its Affiliates) or
“group” (within the meaning of Section 13(d) or 14(d)
of the Exchange Act) acquires, directly or indirectly, the
beneficial ownership (as such term is defined in Rule 13d-3
promulgated under the Exchange Act) of outstanding shares of
capital stock and/or other equity securities of the Company, in a
single transaction or series of related transactions (including,
without limitation, one or more tender offers or exchange offers),
representing at least 50% of the voting power of or economic
interests in the then outstanding shares of capital stock of the
Company.
“Market Price” means, as
of the date of determination, the average of the closing prices of
a share of Common Stock on all Trading Markets on which the Common
Stock may at the time be listed, or, if there have been no sales on
any such Trading Market on any day, the average of the highest bid
and lowest asked prices on all such Trading Markets at the end of
such day.
“OTC Markets” means either
OTC QX or OTC QB of the OTC Markets Group, Inc.
“Person” means an
individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
“Shares” means shares of
the Company’s Common Stock, $0.05 par value per share (the
“Common
Stock”).
“Trading Market” shall
mean any of the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the
NYSE MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the
NASDAQ Global Select Market, the New York Stock Exchange or the OTC
Markets (or any successors to any of the foregoing).
“VWAP” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Stock is then listed or quoted
on a Trading Market, the daily volume weighted average sales price
of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or
quoted as reported by such Trading Market, (b) if the Common
Stock is not then listed or quoted for trading on a Trading Market
and if prices for the Common Stock are then reported on The Pink
Open Market (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share
of the Common Stock so reported, or (c) in all other cases, the fair market value of a
share of Common Stock as determined by an independent appraiser
selected in good faith by the purchasers of a majority in interest
of the Shares then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be borne equally by
the Company and the purchasers. For the avoidance of doubt,
with respect to clause (a) above, the VWAP for any date on which
the Common Stock is not traded shall be the VWAP of the nearest
preceding date.
SECTION
1.
VESTING; EXERCISE
OF WARRANT; LIMITATION ON EXERCISE; TAXES; TRANSFER;
DIVISIBILITY.
1.1. VESTING.
The Warrant Shares shall vest immediately upon
issuance.
1.2. EXERCISE
OF WARRANT. This Warrant may be exercised for vested Warrant
Shares, in whole or in part, at any time after payment prior to the
Expiration Date. This Warrant may be exercised by delivery by the
Warrantholder to the Company of the following:
(a) this
Warrant, accompanied by the Exercise Form annexed hereto (the
“Exercise
Form”) duly executed by the Warrantholder, at the
Company’s offices at 80 Orville Drive, Suite 102, Bohemia,
New York 11716 (or such other office or agency of the Company as it
may designate by notice to the Warrantholder) during normal
business hours on any Business Day;
(b) payment
of an amount equal to (x)
the number of Warrant Shares then issuable multiplied by
(y) the Exercise Price by
wire transfer or immediately available funds or by certified or
official bank check; and
(c) such
documentation as to the identity and authority of the Warrantholder
as the Company may reasonably request.
1.3. ISSUANCE
OF WARRANT SHARES. The Warrant Shares shall be deemed by the
Company to be issued to the Warrantholder as the record holder of
the Warrant Shares as of the close of business on the date on which
this Warrant shall have been surrendered and payment made for the
Warrant Shares as aforesaid. Within two (2) Business Days following
the exercise of this Warrant as provided above, the Company shall
cause its transfer agent to issue the Warrant Shares through the
facilities of its transfer agent for the account of the
Warrantholder.
1.4. LIMITATION
ON EXERCISE. If this Warrant is not exercised prior to the
Expiration Date or is terminated pursuant to Section 6, this Warrant shall
cease to be exercisable and shall become void, and all rights of
the Warrantholder hereunder shall cease.
1.5. PAYMENT
OF TAXES. The issuance of certificates for any Warrant Shares that
are certificated shall be made without charge to the Warrantholder
for any Share transfer or other issuance tax in respect
thereto.
SECTION
2.
RESERVATION OF
SHARES.2.1.
All
Warrant Shares issued upon the exercise of the rights represented
by this Warrant shall, upon issuance and payment of the Exercise
Price in cash, be validly issued, fully paid and non-assessable and
free from all taxes, liens, security interests, charges and other
encumbrances with respect to the issuance thereof other than taxes
in respect of any transfer occurring contemporaneously with such
issuance and restrictions under applicable state and federal
securities Laws. During the period within which this Warrant may be
exercised, the Company shall at all times have authorized and
reserved, and keep available and free from preemptive or similar
rights, a sufficient number of Shares to provide for the exercise
of this Warrant.
SECTION
3.
EXCHANGE, LOSS OR
DESTRUCTION OF WARRANT.3.1
Upon
receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant and, if
requested by the Company, an agreement to indemnify the Company for
any loss resulting from the replacement of this Warrant, the
Company will execute and deliver a new Warrant of like
tenor.
SECTION
4.
OWNERSHIP OF
WARRANT. 4.1
The
Company may deem and treat the person or entity in whose name this
Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made
by anyone other than the Company) for all purposes and shall not be
affected by any notice to the contrary.
SECTION
5.
ADJUSTMENT OF
EXERCISE PRICE AND NUMBER OF SHARES. The Exercise Price and the
number of Shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the
occurrence of certain events described in this Section 5.
5.1. SUBDIVISION
OR COMBINATION OF SHARES. In case the Company shall at any time
subdivide its outstanding Shares into a greater number of Shares,
the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the
outstanding Shares of the Company shall be combined into a smaller
number of Shares, the Exercise Price in effect immediately prior to
such combination shall be proportionately increased.
5.2. NO
VOTING RIGHTS. Nothing contained in this Warrant shall be construed
as conferring upon the holder hereof the right to vote or to
consent to receive notice as a shareholder of the Company on any
other matters or any rights whatsoever as a shareholder of the
Company.
5.3. NOTICE
OF ADJUSTMENT. When the Exercise Price is adjusted pursuant to any
provision of this Section 5, the Company shall promptly (i) deliver
a notice to the Warrantholder, and (ii) file with the transfer
agent for the Warrants a certificate of an officer of the Company,
in each case, setting forth the Exercise Price after such
adjustment and any resulting adjustment to the number of Warrant
Shares, and setting forth a brief statement of the facts requiring
such adjustment and a computation thereof. To the extent that any
notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company, the Company shall
simultaneously file such notice with the Commission pursuant to a
Report on Form 8-K. The Warrantholder shall remain entitled to
exercise this Warrant during the period commencing on the date of
such notice to the effective date of the event triggering such
notice except as may otherwise be expressly set forth
herein.
5.4. CERTAIN
EVENTS. If any change in the outstanding Shares of the Company or
any other event occurs as to which the other provisions of this
Section 5 are not
strictly applicable or if strictly applicable would not fairly
effect the adjustments to this Warrant in accordance with the
essential intent and principles of such provisions, then the
Company shall make in good faith an adjustment in the number and
class of Shares issuable under this Warrant, the Exercise Price
and/or the application of such provisions, in accordance with such
essential intent and principles, so as to protect such purchase
rights as aforesaid. The adjustment shall be such as will give the
Warrantholder, upon exercise for the same aggregate Exercise Price,
the total number, class and kind of Shares as the Warrantholder
would have owned had this Warrant been exercised prior to the event
and had the Warrantholder continued to hold such Shares until after
the event requiring adjustment.
SECTION
6.
NOTICE OF CORPORATE
EVENTS. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of
its Common Stock, including without limitation, any granting of
rights or warrants to subscribe for or purchase any capital stock
of the Company or of any rights, (ii) enters into any agreement
contemplating or solicits stockholder approval for any Fundamental
Transaction, or (iii) authorizes the dissolution, liquidation or
winding up of the affairs of the Company, then, in each case, the
Company shall cause to be delivered to the Warrantholder at least
twenty (20) calendar days prior to the applicable record or
effective date on which a Person would be required to hold Common
Stock in order to participate in or vote with respect to such event
or transaction a written notice stating the date on which a record
is to be taken for the purpose of such event or transaction, or if
a record is not to be taken, the date as of which the holders of
the Common Stock to be entitled to participate or vote in event or
transaction are to be determined. To the extent that any notice
provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Report on Form 8-K. The Holder
shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to 5:00 P.M. Eastern Time on
the Business Day immediately preceding the effective date of the
event triggering such notice (the “Corporate Event Exercise
Date”) in order to participate in or vote with respect
to such event or transaction except as may otherwise be expressly
set forth herein; provided, however, that upon the
consummation or occurrence of an event described in either clause
(ii) or (iii) above, this Warrant will terminate as of the
Corporate Event Exercise Date.
SECTION
7.
CALL PROVISION.
If at any
time commencing twelve (12) months from the date of this Warrant,
but before the Expiration Date, the Volume Weighted Average Pricing
(“VWAP”)
of the Company’s Common Stock exceeds $19.00 (subject to
adjustment for forward and reverse stock splits, recapitalizations,
stock dividends and the like as set forth in Section 5) for each of
thirty consecutive trading days (the “Measurement
Period”), then the
Company may, at any time in its sole discretion, call for the
exercise of this Warrant, in its entirety
(“Call
Right”). To exercise
the Call Right, the Company must deliver to the Warrantholder an
irrevocable written notice (a “Call
Notice) indicating that the
provisions of this Section of the Warrant have been satisfied, and
that the Warrantholder accordingly must exercise all, or a portion,
of this Warrant prior to the Call Date, as defined below. Such Call
Notice shall include language notifying the Warrantholder that the
failure to comply with the Call Notice shall result in the
forfeiture and cancellation of any unexercised Warrant Shares
granted to Warrantholder hereunder. If the conditions set forth
above for such Call Notice are met and the Warrantholder has not
exercised all of the Shares exercisable under this Warrant by
delivering an Exercise Notice and payment therefor to the Company
within thirty (30) trading days after the date the Call Notice is
received by the Warrantholder (such date and time, the
“Call
Date”), then the
Warrants for which a Exercise Notice shall not have been received
by the Call Date will be cancelled at 5:00 p.m. (Eastern Time) on
the Call Date. In furtherance thereof, the Company covenants and
agrees that it will honor all Exercise Notices with respect to the
Warrant Shares subject to a Call Notice that are tendered through
5:00 p.m. (Eastern Time) on the Call Date. Notwithstanding anything
to the contrary set forth in this Warrant, provided that
the Warrantholder shall have furnished
to the Company, within ten (10) calendar days after the
Warrantholder’s receipt of written notice from the Company,
such information regarding the Warrantholder, the Warrant Shares
held by it, and the intended method of disposition of such
securities as is reasonably required to effect the registration of
such Warrantholder’s Warrant Shares and is set forth in
reasonable detail in such written notice, the Company may not
deliver a Call Notice or require the cancellation of this Warrant
(and any such Call Notice shall be void), unless the Company shall
have filed a registration
statement (“Registration
Statement”) under the
Securities Act of 1933, as amended, covering the Warrant Shares and
such Registration Statement has been declared effective by the
United States Securities and Exchange
Commission.
SECTION
8.
COMPLIANCE WITH
SECURITIES ACT; TRANSFERABILITY OF WARRANT; DISPOSITION OF WARRANT
SHARES AND COMMON STOCK.
8.1. COMPLIANCE
WITH SECURITIES ACT. The Warrantholder, by acceptance hereof,
agrees that this Warrant, the Warrant Shares and the shares of
Common Stock issuable upon conversion of the Warrant Shares are
being acquired for investment and that it shall not offer, sell or
otherwise dispose of this Warrant, any Warrant Shares or any shares
of Common Stock issuable upon conversion of the Warrant Shares
except under circumstances which will not result in a violation of
the Act or any applicable state securities laws. This Warrant, the
Warrant Shares and the shares of Common Stock issuable upon
conversion of the Warrant Shares (unless registered under the Act)
shall be stamped or imprinted with a legend in substantially the
following form:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE
SECURITIES OR BLUE SKY LAWS OF ANY STATE. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO
RULE 144 OF THE ACT.
8.2 ACCREDITED
INVESTOR; ACCESS TO INFORMATION; PRE-EXISTING RELATIONSHIP.
Warrantholder either (i) presently qualifies and will as of any
exercise of this Warrant qualify as an “accredited
investor” within the meaning of Regulation D of the rules and
regulations promulgated under the Act or (ii) has been provided by
the Company with the Company’s most recent audited financial
statements and non-financial statement information as set forth in
Rule 502(b)(2) promulgated under the Act. Warrantholder has had the
opportunity to ask questions of, and to receive answers from,
appropriate executive officers of the Company with respect to the
terms and conditions of the transactions contemplated hereby and
with respect to the business, affairs, financial condition and
results of operations of the Company. Warrantholder has had access
to such financial and other information as is necessary in order
for Warrantholder to make a fully informed decision as to
investment in the Company, and has had the opportunity to obtain
any additional information necessary to verify any of such
information to which Warrantholder has had access. Warrantholder
further represents and warrants that the Warrantholder has either
(a) a pre-existing relationship with the Company or one or more of
its officers or directors consisting of personal or business
contacts of a nature and duration which enable the Warrantholder to
be aware of the character, business acumen and general business and
financial circumstances of the Company or the officer or director
with whom such relationship exists or (b) such business or
financial expertise as to be able to protect the
Warrantholder’s own interests in connection with the purchase
of the Warrant Shares.
8.3 WARRANT
NOT TRANSFERABLE. The Warrant Shares, if and when issued, may be
transferred or sold only in compliance with applicable United
States federal and state securities laws or of any requirements of the Trading Market
upon which the Common Stock may be quoted or listed.
Any instrument purporting to make an
assignment in contravention of this Section 8.3
shall be void.
8.4 DISPOSITION
OF WARRANT SHARES. With respect to any offer, sale, or other
disposition of any Warrant Shares prior to registration of such
shares, the Warrantholder and each subsequent Warrantholder agrees
to give written notice to the Company prior thereto, describing
briefly the manner thereof, together with a written opinion of such
Warrantholder’s counsel, if reasonably requested by the
Company, to the effect that such offer, sale or other disposition
may be effected without registration or qualification (under the
Act as then in effect or any federal or state law then in effect)
of such Warrant Shares and indicating whether or not under the Act
certificates for such Warrant Shares to be sold or otherwise
disposed of require any restrictive legend as to applicable
restrictions on transferability. Promptly upon receiving such
written notice and opinion, the Company, as promptly as
practicable, shall notify such Warrantholder that such
Warrantholder may sell or otherwise dispose of such Warrant Shares
all in accordance with the terms of the notice delivered to the
Company. If a determination has been made pursuant to this Section
8.4 that the opinion of the counsel for the Warrantholder is not
reasonably satisfactory to the Company, the Company shall so notify
the Warrantholder promptly after such determination has been made.
Notwithstanding the foregoing, such Warrant Shares may be offered,
sold or otherwise disposed of in accordance with Rule 144 under the
Act, provided that the Company shall have been furnished with such
information as the Company may request to provide reasonable
assurance that the provisions of Rule 144 have been satisfied. Each
certificate representing the Warrant Shares thus transferred
(except a transfer pursuant to Rule 144) shall bear a legend as to
the applicable restrictions on transferability in order to insure
compliance with the Act, unless in the aforesaid opinion of counsel
for the Warrantholder, such legend is not required in order to
insure compliance with the Act. The Company may issue stop transfer
instructions to its transfer agent in connection with such
restrictions.
8.5 MARKET
STANDOFF. The Warrantholder hereby agrees that it will not, without
the prior written consent of the managing underwriter, during the
period commencing on the date of the final prospectus relating to a
registered public offering of the Company and ending on the date
specified by the Company and the managing underwriter (such period
not to exceed one hundred eighty (180) days) (i) lend, offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any Warrant Shares, or (ii)
enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership
of the Warrant Shares, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of
securities, in cash or otherwise. The underwriters in connection
with a registered public offering of the Company are intended third
party beneficiaries of this Section and shall have the right, power
and authority to enforce the provisions hereof as though they were
a party hereto. Warrantholder further agrees to execute such
agreements as may be reasonably requested by the underwriters or
the Company in a registered public offering of the Company that are
consistent with this Section 8.5 or that are necessary to give
further effect thereto.
In
order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to shares of the
Company’s capital stock acquired through the exercise of this
Warrant until the end of such period. The Warrantholder agrees that
a legend reading substantially as follows shall be placed on all
certificates representing all shares of the Warrantholder (and the
shares or securities of every other person subject to the
restriction contained in this Section 8.5):
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP
PERIOD AFTER THE EFFECTIVE DATE OF THE ISSUER’S REGISTRATION
STATEMENT FILED UNDER THE ACT, AS AMENDED, AS SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE
SECURITIES, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S
PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF
THESE SHARES.”
SECTION
9.
COMPENSATION FOR BUY-IN ON FAILURE TO
TIMELY DELIVER WARRANT SHARES UPON EXERCISE. In
addition to any other rights available to the Warrantholder, if the
Company fails to cause its transfer agent to transmit to the
Warrantholder the Warrant Shares in accordance with the provisions
of Section 1.3 above pursuant to an exercise of this Warrant on or
before the Expiration Date, and if after such date the
Warrantholder is required by its broker to purchase (in an open
market transaction or otherwise) or the Warrantholder’s
brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Warrantholder of the
Warrant Shares which the Warrantholder anticipated receiving upon
such exercise (a “Buy-In”), then the
Company shall (A) pay in cash to the Warrantholder the amount, if
any, by which (x) the Warrantholder’s total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to
deliver to the Warrantholder in connection with the exercise at
issue times (2) the price at which the sell order giving rise to
such purchase obligation was executed, and (B) at the option of the
Warrantholder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not
honored (in which case such exercise shall be deemed rescinded) or
deliver to the Warrantholder the number of shares of Common Stock
that would have been issued had the Company timely complied with
its exercise and delivery obligations hereunder. For example,
if the Warrantholder purchases Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price
giving rise to such purchase obligation of $10,000, under clause
(A) of the immediately preceding sentence the Company shall be
required to pay the Warrantholder $1,000. The Warrantholder shall
provide the Company written notice indicating the amounts payable
to the Warrantholder in respect of the Buy-In and, upon request of
the Company, evidence of the amount of such loss. Nothing
herein shall limit a Warrantholder’s right to pursue any
other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s
failure to timely deliver shares of Common Stock upon exercise of
the Warrant as required pursuant to the terms hereof.
SECTION
10.
CASHLESS EXERCISE.
In the event that, at the time of the exercise of this Warrant by
the Warrantholder, there is not an effective Registration Statement
covering the sale by the Warrantholder of the Warrant Shares to be
issued upon such exercise, the Warrantholder, in lieu of exercising
this Warrant by the cash payment of the Exercise Price pursuant to
Section 1.2, may elect, at any time on or before the Expiration
Date, to surrender this Warrant and receive that number of shares
of Common Stock computed using the following formula:
Where: X = the
number of shares of Common Stock to be issued to the
Warrantholder.
Y
=
the number of
shares of Common Stock that Warrantholder would otherwise have been
entitled to purchase hereunder pursuant to Section 1.2 (or such
lesser number of shares as the Warrantholder may designate in the
case of a partial exercise of this Warrant).
A
=
the Market Price at
the time such exercise
B
=
the Exercise Price
then in effect.
Election
to exercise under this Section 10 may be made by delivering a
signed form of subscription to the Company via facsimile, to be
followed by delivery of this Warrant.
SECTION
11.
MISCELLANEOUS.
11.1. ENTIRE
AGREEMENT. This Agreement and the documents referred to herein
constitute the entire agreement among the parties and supersede any
prior agreements or understandings regarding the subject matter
hereof.
11.2. SUCCESSORS
AND ASSIGNS. The terms and conditions of this Warrant shall inure
to the benefit of and be binding upon the parties’ respective
successors and assigns. Nothing in this Warrant, express or
implied, is intended to confer upon any party, other than the
parties hereto or their respective successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of
this Warrant, except as expressly provided in this
Warrant.
11.3. AMENDMENTS
AND WAIVERS. No failure on the part of either party to exercise and
no delay in exercising any power or right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of
any power or right preclude any other or further exercise thereof
or the exercise of any other power or right. The remedies herein
and in any other instrument, document or agreement delivered or to
be delivered by either party hereunder or in connection herewith
are cumulative and not exclusive of any remedies provided by law.
No notice to or demand on a party not required hereunder shall in
any event entitle such party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of
the right of the other party to any other or further action in any
circumstances without notice or demand. No amendment, modification
or waiver of any provision of this Warrant or consent to any
departure by either party therefrom shall be effective unless the
same shall be in writing and signed by the Company and the
Warrantholder.
11.4. SECTION
AND OTHER HEADINGS. The titles and subtitles used in this Warrant
are used for convenience only and are not to be considered in
construing or interpreting this Warrant.
11.5. NOTICES.
All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (i) upon personal delivery to
the party to be notified; (ii) when sent by confirmed electronic
mail or facsimile if sent during normal business hours of the
recipient, if not, then on the next Business Day; (iii) five (5)
days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (iv) 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 to the address as set forth in the
Warrantholder’s signature page to the Purchase Agreement or
at such other address as such party may designate by ten (10)
days’ advance written notice to the other parties
hereto.
11.6. SEVERABILITY.
If one or more provisions of this Warrant are held to be
unenforceable under applicable law, such provision shall be
excluded from this Warrant and the balance of this Warrant shall be
interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
11.7. FRACTIONAL
SHARES. No fractional Shares or scrip representing fractional
Shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a Share called for upon any exercise
hereof, the Company shall round up to the nearest whole
Share.
11.8 DELIVERY
OF NEW WARRANT. Unless the purchase rights represented by this
Warrant shall have expired or shall have been fully exercised, the
Company shall, at the time of delivery of the certificate or
certificates representing the Warrant Shares being issued in
accordance herewith, deliver to the Warrantholder a new warrant
evidencing the rights of the Warrantholder to purchase the
unexpired and unexercised Warrant Shares called for by this
Warrant. Such new warrant shall in all other respects be identical
to this Warrant.
11.9. GOVERNING
LAW. This Warrant shall be governed by and construed under the
substantive laws of New York without regard to the conflicts of law
provisions thereof. The federal courts in New York, New York shall
have exclusive jurisdiction of any and all actions or suits
commenced by either party arising under or with respect to this
Warrant.
(Signature Page Follows)
IN WITNESS WHEREOF, the Company has
caused this Warrant to be signed by its duly authorized officer as
of the first date written above.
|
SCIENTIFIC
INDUSTRIES, INC.
By:
_______________________________
Name:
Title:
|
|
|
IN WITNESS WHEREOF, the undersigned has
caused this Warrant to be signed by its duly authorized officer as
of the first date written above.
|
WARRANTHOLDER:
If an individual:
_______________________________
Name:
|
|
If an entity:
Name of
entity:
By:
_______________________________
Name:
Title:
|
SCIENTIFIC INDUSTRIES, INC.
WARRANT EXERCISE FORM
(To be
executed upon exercise of Warrant)
The
undersigned, the record holder of the Warrant, hereby irrevocably
elects to exercise the right, represented by this Warrant, to
[check applicable subsection]:
_________ (a)
Purchase __________ shares of Common Stock of Scientific
Industries, Inc., pursuant to the terms of the attached Warrant and
herewith pays the Exercise Price in accordance with the terms of
the Warrant by tendering cash payment for such Warrant
Shares;
OR
_________ (b)
Exercise the attached Warrant for [all of the shares] [________of
the shares] [cross out inapplicable phrase] purchasable under the
Warrant pursuant to the cashless exercise provisions of Section 10
of such Warrant.
The
undersigned hereby represents and warrants that (i) the undersigned
is acquiring such shares for its own account for investment
purposes only, and not for resale or with a view to distribution of
such shares or any part thereof and (ii) the undersigned is an “accredited
investor” as defined in Regulation D under the Securities Act
of 1933, as amended, and a “sophisticated investor” in
accordance with the exemption from registration under such Act in
accordance with Section 4(a)(2) thereof.
WARRANTHOLDER
Name:
Name in
which shares should be registered:
[_______________________]
REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
is made and entered into as of April [__], 2021, by and among
Scientific Industries, Inc., a Delaware corporation (the
“Company”),
and each of the investors listed on Schedule A hereto
(collectively, the “Investors”
and each, an “Investor”).
WHEREAS, the Company and the Investors
are parties to a Securities Purchase Agreement, dated as of April
[__], 2021 (the “Purchase
Agreement”), pursuant to which, among other things,
the Investors have requested, and the Company has agreed to
provide, registration rights with respect to (i) the shares of the
Common Stock (as defined below) purchased by the Investors from the
Company thereunder (the “Purchased
Shares”) and (ii) the shares of Common Stock issuable
upon the exercise of warrants delivered to the Investors thereunder
(the “Warrant
Shares” and, together with the Purchased Shares, the
“Shares”);
and
WHEREAS, in light of the foregoing, the
Parties desire to set forth certain registration rights applicable
to the Registrable Securities (as defined below).
NOW THEREFORE, in consideration of the
mutual covenants and agreements set forth herein and for good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by each Party hereto, the Parties hereby agree
as follows:
1. Definitions.
As used in this Agreement, the following terms have the meanings
indicated:
“Affiliate”
of any specified Person means any other person that, directly or
indirectly, is in control of, is controlled by, or is under common
control with, such specified Person. For purposes of this
definition, “control” of a Person means the power,
direct or indirect, to direct or cause the direction of the
management and policies of such Person, whether through ownership
of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have
meanings correlative to the foregoing.
“Agreement”
has the meaning set forth in the preamble.
“Automatic Shelf
Registration Statement” means an “automatic shelf registration
statement” as defined under Rule 405.
“Blackout
Period” has the meaning set forth in Section 3(n).
“Board”
means the board of directors of the Company.
“Business
Day” means any day other than a Saturday, Sunday or
any other day on which banking institutions in the State of New
York are authorized or required to be closed.
“Commission”
means the Securities and Exchange Commission or any other federal
agency then administering the Securities Act or the Exchange
Act.
“Common
Stock” means the common stock, par value $0.05 per
share, of the Company.
“Company”
has the meaning set forth in the preamble.
“Company
Securities” means any equity interest of any class or
series in the Company.
“Demand
Effectiveness Period” has the meaning set forth in
Section
2(a)(ii).
“Demand
Notice” has the meaning set forth in Section 2(a)(i).
“Demand Registration
Period” means the period commencing 180 days after the
expiration of the Mandatory Shelf Effectiveness Period and ending
on the fifth (5th) anniversary of the
date hereof.
“Effective
Date” means the time and date that a Registration
Statement is first declared effective by the Commission or
otherwise becomes effective.
“Effectiveness
Period” shall mean the Demand Effectiveness Period or
the Mandatory Shelf Effectiveness Period, as
applicable.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
“FINRA”
means the Financial Industry Regulatory Authority,
Inc.
“Holder”
means any record holder of Registrable Securities that (i) is a
Party hereto or (ii) to whom registration rights conferred by this
Agreement have been transferred in compliance with Section 10(d) hereof;
provided,
however, that any
Person referenced in clause (ii) shall be a Holder only if
such Person agrees in writing to be bound by and subject to the
terms set forth in this Agreement.
“Holder Demand
Registration” has the meaning set forth in
Section
2(a)(i).
“Initiating
Holders” means the Holders delivering the Demand
Notice or the Underwritten Offering Notice, as
applicable.
“Investor”
has the meaning set forth in the preamble.
“Losses”
has the meaning set forth in Section 6(a).
“Mandatory Shelf
Effectiveness Period” has the meaning set forth in
Section
2(b)(i).
“Mandatory Shelf
Filing Date” has the meaning set forth in Section 2(b)(i).
“Mandatory Shelf
Registration Statement” has the meaning set forth in
Section
2(b)(i).
“Mandatory Shelf
Securities” means the Registrable Securities issued
pursuant to the Purchase Agreement.
“Parties”
means the Company, the Investors and any Person that may become a
party to this Agreement pursuant to the terms hereof.
“Person”
means an individual, corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability
company, joint stock company, estate, trust, government (or an
agency or subdivision thereof) or other entity of any
kind.
“Piggyback
Notice” has the meaning set forth in Section 2(d)(i).
“Piggyback
Registration” has the meaning set forth in
Section
2(d)(i).
“Proceeding”
means any action, claim, suit, proceeding or investigation
(including a preliminary investigation or partial proceeding, such
as a deposition) pending or, to the knowledge of the Company, to be
threatened.
“Prospectus”
means the prospectus included in a Registration Statement
(including a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective
Registration Statement in reliance upon Rule 430A, Rule 430B or
Rule 430C promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and all other amendments and
supplements to the Prospectus, including post-effective amendments,
and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Purchase
Agreement” has the meaning set forth in the
preamble.
“Records”
has the meaning set forth in Section 3(l).
“Registrable
Securities” means the Shares; provided, however, that Registrable
Securities shall not include: (i) any Shares the offering and
sale of which has been registered under the Securities Act, and
that have been disposed of pursuant to an effective Registration
Statement; (ii) any Shares transferred to a Person who is not
entitled to the registration and other rights hereunder;
(iii) any Shares that have been sold or transferred by the
Holder thereof pursuant to Rule 144 (or any similar provision then
in force under the Securities Act) and the transferee thereof does
not receive “restricted securities” as defined in Rule
144; and (iv) any Shares that cease to be outstanding (whether
as a result of repurchase and cancellation, conversion or
otherwise). The Company shall not be required to register the
offering and sale of the same Registrable Securities under more
than one Registration Statement at any one time.
“Registration
Expenses” means: (i) all registration and filing
fees (including fees and expenses (A) with respect to filings
required to be made with the Trading Market or FINRA and
(B) in compliance with applicable state securities or
“Blue Sky” laws); (ii) reasonable printing
expenses (including expenses of printing certificates for Company
Securities and of printing Prospectuses if the printing of
Prospectuses is reasonably requested by a Selling Stockholder
included in the Registration Statement); (iii)
reasonable messenger, telephone and delivery expenses; (iv)
reasonable transfer agent fees; (v) reasonable fees and
disbursements of counsel, auditors and accountants for the Company;
(vi) Securities Act liability insurance, if the Company so
desires such insurance; and (vii) reasonable fees and expenses
of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this
Agreement.
“Registration
Statement” means a registration statement of the
Company in the form required to register the resale of the
Registrable Securities under the Securities Act, and including any
Prospectus, amendments and supplements to each such registration
statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by
reference or deemed to be incorporated by reference in such
registration statement.
“Requested
Underwritten Offering” has the meaning set forth in
Section
2(c)(i).
“Rule
144” means Rule 144 promulgated by the Commission
pursuant to the Securities Act.
“Rule
405” means Rule 405 promulgated by the Commission
pursuant to the Securities Act.
“Rule
415” means Rule 415 promulgated by the Commission
pursuant to the Securities Act.
“Rule
424” means Rule 424 promulgated by the Commission
pursuant to the Securities Act.
“Securities
Act” means the Securities Act of 1933, as
amended.
“Selling
Expenses” means (i) all discounts, commissions or fees
of underwriters, selling brokers, dealer managers or similar
industry professionals and stock transfer taxes applicable to the
sale of Registrable Securities, (ii) and fees and disbursements of
counsel for any Holder or Selling Stockholder and (iii) all
expenses relating to marketing the sale of the Registrable
Securities, including expenses related to conducting a “road
show.”
“Selling
Stockholder” means a Party (other than the Company)
included as a selling stockholder selling Registrable Securities
pursuant to a Registration Statement.
“Selling Stockholder
Indemnified Persons” has the meaning set forth in
Section
6(a).
“Shares”
has the meaning set forth in the preamble.
“Shelf Registration
Statement” means a Registration Statement of the
Company filed with the Commission on Form S-3 (or any equivalent or
successor form under the Securities Act) for an offering to be made
on a continuous or delayed basis pursuant to Rule 415 (or any
similar rule that may be adopted by the Commission) covering
Registrable Securities, as applicable.
“Suspension
Period” has the meaning set forth in Section 3(o).
“Trading
Market” means the principal national securities
exchange on which Registrable Securities are listed.
“Underwritten
Offering” means an underwritten offering of Common
Stock in which shares of Common Stock are sold to one or more
underwriters for reoffering to the public (whether a Requested
Underwritten Offering or in connection with a public offering of
Common Stock by the Company, a public offering of Common Stock by
stockholders, or both, but excluding an offering relating solely to
an employee benefit plan, an offering relating to a transaction on
Form S-4 or S-8 (or any similar forms adopted after the date hereof
as replacements therefor) or an offering on any registration
statement form that does not permit secondary sales).
“Underwritten
Offering Notice” has the meaning set forth in
Section
2(c)(i).
“WKSI”
means a “well known seasoned
issuer” as defined under Rule 405.
Unless
the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or
neuter forms; (b) references to Sections refer to Sections of
this Agreement; (c) the terms “include,”
“includes,” “including” and words of like
import shall be deemed to be followed by the words “without
limitation”; (d) the terms “hereof,”
“herein” or “hereunder” refer to this
Agreement as a whole and not to any particular provision of this
Agreement; (e) unless the context otherwise requires, the term
“or” is not exclusive and shall have the inclusive
meaning of “and/or”; (f) defined terms herein will
apply equally to both the singular and plural forms and derivative
forms of defined terms will have correlative meanings;
(g) references to any law or statute shall include all rules
and regulations promulgated thereunder, and references to any law,
statute or rule shall be construed as including any legal and
statutory provisions consolidating, amending, succeeding or
replacing the applicable law, statute or rule; (h) references
to any Person include such Person’s successors and permitted
assigns; and (i) references to “days” are to
calendar days unless otherwise indicated.
2. Registration.
(a) Demand
Registration.
(i) During the Demand
Registration Period, the Holders of at least 200,000 Registrable
Securities (adjusted for any stock split, stock dividend, reverse
stock split or similar change in the Common Stock after the date of
this Agreement) shall have the option and right, exercisable by
delivering a written notice to the Company (a “Holder Demand
Notice”), to require the Company to, pursuant to the
terms of and subject to the limitations contained in this
Agreement, prepare and file with the Commission a Registration
Statement on Form S-1 (or any equivalent or successor form under
the Securities Act) (or to the extent the Company is eligible to
use Form S-3 or any equivalent or successor form or forms, on Form
S-3 or any comparable or successor form) registering the offering
and sale of at least 200,000 Registrable Securities (adjusted for
any stock split, stock dividend, reverse stock split or similar
change in the Common Stock after the date of this Agreement) on the
terms and conditions specified in the Holder Demand Notice, which
may include sales on a delayed or continuous basis pursuant to Rule
415 pursuant to a Shelf Registration Statement (a
“Holder Demand
Registration”). The Holder Demand Notice must set
forth the number and type of Registrable Securities that the
Initiating Holders anticipate will be included in such Holder
Demand Registration and the intended methods of disposition
thereof.
(ii) Within
five (5) Business Days of the receipt of the Demand Notice, the
Company shall give written notice of such Demand Notice to all
Holders (other than the Initiating Holders) and, within thirty (30)
days thereof, shall, subject to the limitations of this
Section 2(a), file
a Registration Statement in accordance with the terms and
conditions of the Demand Notice, which Registration Statement shall
cover, in addition to the Registrable Securities set forth in the
Demand Notice, all of the Registrable Securities that such Holders
shall in writing request to be included in the Demand Registration
(provided such request is given to the Company within ten (10) days
of receipt of notice of the Demand Notice given by the Company
pursuant to this Section
2(a)(ii) and includes such information regarding the
requesting Holder as is required to be disclosed in connection with
such Demand Registration pursuant to Regulation S-K promulgated
under the Securities Act). The Company shall use commercially
reasonable efforts to cause such Registration Statement to become
and remain effective under the Securities Act until the earlier of
(A) one hundred eighty (180) days (or one (1) year if a Shelf
Registration Statement is requested) after the Effective Date or
(B) the date on which all Registrable Securities covered by
such Registration Statement have been sold or cease to be
Registrable Securities (the “Demand
Effectiveness Period”); provided, however, that such period shall
be extended for a period of time equal to the period the Selling
Stockholders refrain from selling any securities included in such
Registration Statement at the request of an underwriter of the
Company or the Company pursuant to this Agreement.
(iii) Subject
to the other limitations contained in this Agreement, the Company
is not obligated hereunder to effect: (A) more than two (2)
Demand Registrations during the Demand Registration Period, (B)
more than one (1) Demand Registration in a calendar year, (C) a
Demand Registration within one hundred eighty (180)) days of the
closing of any Underwritten Offering, or (D) a subsequent Demand
Registration pursuant to a Demand Notice if a Registration
Statement covering all of the Registrable Securities covered by
such Demand Notice shall already have become effective under the
Securities Act and remains effective under the Securities Act and
is sufficient to permit offers and sales of such Registrable
Securities on the terms and conditions specified in such Demand
Notice in accordance with the intended timing and method or methods
of distribution thereof specified in such Demand
Notice.
(iv) Subject
to Section 2(a)(i),
a Selling Stockholder may withdraw all or any portion of its
Registrable Securities included in a Demand Registration from such
Demand Registration at any time prior to the effectiveness of the
applicable Registration Statement. Upon delivery of a notice by a
Selling Stockholder to the effect that the Selling Stockholder is
withdrawing Registrable Securities such that the remaining
Registrable Securities are below the Minimum Amount, the Company
shall cease all efforts to secure effectiveness of the applicable
Registration Statement.
(v) Subject to the
limitations contained in this Agreement, the Company shall effect
any Demand Registration on such appropriate registration form of
the Commission (x) as shall be selected by the Company and
(y) as shall permit the disposition of the Registrable
Securities in accordance with the intended method or methods of
disposition specified in the Initiating Holders’ request for
such registration; provided, however, that if the Company
becomes, and is at the time of its receipt of a Demand Notice, a
WKSI, the Demand Registration for any offering and selling of
Registrable Securities shall be effected pursuant to an Automatic
Shelf Registration Statement, which shall be on Form S-3 or any
equivalent or successor form under the Securities Act if available
to the Company. If at any time a Registration Statement is
effective and a Selling Stockholder provides written notice to the
Company that it intends to effect an offering of all or part of the
Registrable Securities included on such Registration Statement, the
Company will amend or supplement such Registration Statement as may
be necessary in order to enable such offering to take
place.
(vi) Without
limiting Section 3,
in connection with any Demand Registration pursuant to and in
accordance with this Section 2(a), the Company shall
(A) promptly prepare and file or cause to be prepared and
filed (1) such additional forms, amendments, supplements,
prospectuses, certificates, letters, opinions and other documents,
as may be necessary or advisable to register or qualify the
securities subject to such Demand Registration, including under the
securities laws of such states as the Selling Stockholders shall
reasonably request; provided, however, that no such
registration or qualification shall be required in any jurisdiction
where, as a result thereof, the Company would become subject to
general service of process or to taxation or would be required to
qualify to do business or register as a broker or dealer, and
(2) such forms, amendments, supplements, prospectuses,
certificates, letters, opinions and other documents as may be
necessary to apply for listing or to list the Registrable
Securities subject to such Demand Registration on the Trading
Market and (B) do any and all other acts and things that may
be reasonably necessary or appropriate or reasonably requested by
the Selling Stockholders to enable the Selling Stockholders to
consummate a public sale of such Registrable Securities in
accordance with the intended timing and method or methods of
distribution thereof.
(b) Mandatory Shelf
Registration.
(i) As soon as
practicable following the date hereof, and no later than July 31,
2021 (such filing date, the “Mandatory Shelf
Filing Date”), the Company shall use its reasonable
efforts to prepare and file with the Commission a Registration
Statement providing for registration and resale, on a continuous or
delayed basis pursuant to Rule 415, of all of the Mandatory Shelf
Securities (the “Mandatory Shelf
Registration Statement”). The Mandatory Shelf
Registration Statement shall be on Form S-1 (or any equivalent or
successor form) under the Securities Act (or to the extent the
Company is eligible to use Form S-3 or any equivalent or successor
form or forms, on Form S-3 or any comparable or successor form).
The Company shall use its reasonable efforts to cause the Mandatory
Shelf Registration Statement to be declared effective under the
Securities Act by the Commission on or before the date that is
ninety (90) days the Mandatory Shelf Filing Date of the filing (or,
in the event of a “full review” by the Commission, the
date that is one hundred twenty (120) days after the date of the
filing).. The Company shall use its reasonable efforts to keep the
Mandatory Shelf Registration Statement (or any successor Shelf
Registration Statement) continuously effective under the Securities
Act until the earlier of (A) the date when all of the Mandatory
Shelf Securities covered by such Mandatory Shelf Registration
Statement have been sold or cease to be Registrable Securities and
(B) one (1) year after the Effective Date (such period, the
“Mandatory Shelf
Effectiveness Period”). The Investors agree that the
Company may include for registration and resale in the Mandatory
Shelf Registration Statement the shares of Common Stock that it is
required to register pursuant to that certain Securities Purchase
Agreement, dated as of June 18, 2020, among the Company and the
purchasers party thereto.
(ii) In
the event that the Mandatory Shelf Registration Statement is (A)
not filed on or before July 31, 2021 or (B) not declared effective
on or before the date that is ninety (90) days the Mandatory Shelf
Filing Date of the filing (or, in the event of a “full
review” by the Commission, the date that is one hundred
twenty (120) days after the date of the filing (A and B
collectively, an “Event”),
then after the occurrence and pendency of an Event until the Event
is cured, the Company shall, upon the demand of any Holder of
Mandatory Shelf Securities made within 90 days after the occurrence
of such Event, pay to each such Holder an amount in cash equal to
one per cent (1.0%) per month (applied ratably for partial months)
of the amount paid for by such Holder for the Purchased Shares
pursuant to the Placement Agreement then held by such Holder;
provided that such liquidated damages shall cease to accrue in the
event that Rule 144 under the Securities Act is available to you
for the resale of the Purchased Shares without volume or manner
restrictions.
(iii) Without
limiting Section 3,
the Company shall, as promptly as practicable during the Mandatory
Shelf Effectiveness Period:
(1) if required by
applicable law, file with the Commission a post-effective amendment
to the Mandatory Shelf Registration Statement or prepare and, if
required by applicable law, file a supplement to the related
Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required
document necessary to permit the Holders of Mandatory Shelf
Securities to deliver such Prospectus to purchasers of Mandatory
Shelf Securities in accordance with applicable law and, if the
Company shall file a post-effective amendment to the Mandatory
Shelf Registration Statement, use its reasonable efforts to cause
such post-effective amendment to be declared effective under the
Securities Act as promptly as is practicable;
(2) provide the Holders of Mandatory Shelf Securities
copies of any documents to filed pursuant to Section
2(b)(ii)(1) a reasonable
period of time prior to such filing, and use commercially reasonable efforts to address in
each such document when so filed with the Commission such comments
as such Holder of Mandatory Shelf Securities reasonably shall
propose prior to the filing thereof; and
(3) notify the Holders
of Mandatory Shelf Securities as promptly as practicable after the
effectiveness under the Securities Act of any post-effective
amendment filed pursuant to Section
2(b)(ii)(1).
(c) Requested Underwritten
Offering.
(i) Any Holder then
able to effectuate a Demand Registration pursuant to the terms of
Section 2(a) shall
have the option and right, exercisable by delivering written notice
to the Company (an “Underwritten
Offering Notice”), to require the Company, pursuant to
the terms of and subject to the limitations of this Agreement, to
effectuate a distribution of Registrable Securities by means of an
Underwritten Offering pursuant to an effective Registration
Statement (or pursuant to an effective Automatic Shelf Registration
Statement) (a “Requested
Underwritten Offering”); provided, however, that the Registrable
Securities requested to be included in such Requested Underwritten
Offering have an aggregate value at least equal to
$5,000,000.
(ii) The
managing underwriter or managing underwriters of a Requested
Underwritten Offering shall be designated by the Initiating Holders
(provided,
however, that such
designated managing underwriter or managing underwriters shall be a
nationally recognized investment banking firm reasonably acceptable
to the Company). Notwithstanding the foregoing, the Company is not
obligated to effect a Requested Underwritten Offering within 90
days of the closing of an Underwritten Offering.
(iii) If
the managing underwriter or underwriters of a proposed Requested
Underwritten Offering of the Registrable Securities included in a
Demand Registration advise the Company that, in its or their
opinion, the number of securities requested to be included in such
Requested Underwritten Offering exceeds the number which can be
sold in such Requested Underwritten Offering without being likely
to have a significant adverse effect on the price, timing or
distribution of the securities offered or the market for the
securities offered, the securities to be included in such Requested
Underwritten Offering shall be allocated, (A) first,
pro rata among the Parties
(other than the Company) that (prior to any cutback) would
participate in such Underwritten Offering based on the relative
number of Registrable Securities that would be held by each such
Party following any related resale distribution, if any;
provided,
however, that any
securities thereby allocated to a Party that exceed such
Party’s request shall be reallocated among the remaining
Parties in like manner; (B) second, and only if all the
securities referred to in clause (A) have been included in
such registration, to the Company up to the number of securities
that the Company proposes to include in such registration that, in
the opinion of the managing underwriter or underwriters can be sold
without having such adverse effect and (C) third, and only if
all of the securities referred to in clause (B) have been
included in such registration, up to the number of securities that
in the opinion of the managing underwriter or underwriters can be
sold without having such adverse effect.
(d) Piggyback
Registration.
(i) If the Company
shall at any time propose to conduct a registered offering of
Common Stock (whether a registered offering of Common Stock by the
Company or a registered offering of Common Stock by the
Company’s stockholders (including a Requested Underwritten
Offering), or both, but excluding an offering pursuant to
Section 2(b), an
offering relating solely to an employee benefit plan, an offering
relating to a transaction on Form S-4 or S-8 (or any similar forms
adopted after the date hereof as replacements therefor) or an
offering on any registration statement form that does not permit
secondary sales), the Company shall promptly notify all Holders of
such proposal reasonably in advance of (and in any event at least
five (5) Business Days before) the commencement of such offering,
which notice will set forth the principal terms and conditions of
the issuance, including the proposed offering price (or range of
offering prices), the anticipated filing date of the registration
statement (if not yet filed) and the number of shares of Common
Stock that are proposed to be registered (the “Piggyback
Notice”); provided, however, notwithstanding any
other provision of this Agreement, if the managing underwriter or
managing underwriters of an Underwritten Offering (other than a
Requested Underwritten Offering) advise the Company that in their
reasonable opinion that the inclusion of a Holder’s
Registrable Securities requested for inclusion in the subject
Underwritten Offering (and any related registration, if applicable)
would likely have an adverse effect on the price, timing, marketing
or distribution of Common Stock proposed to be included in such
Underwritten Offering, the Company shall have no obligation to
provide a Piggyback Notice to such Holder and such Holder shall
have no right to include any Registrable Securities in such
Underwritten Offering (and any related registration, if
applicable). The Piggyback Notice shall offer the Holders the
opportunity to include in such offering (and any related
registration, if applicable) the number of Registrable Securities
as they may request (a “Piggyback
Registration”); provided, however, that in the event that
the Company proposes to effectuate the subject offering pursuant to
an effective Shelf Registration Statement of the Company other than
an Automatic Shelf Registration Statement, only Registrable
Securities of Holders which are subject to such effective Shelf
Registration Statement may be included in such Piggyback
Registration. The Company shall use commercially reasonable efforts
to include in each such Piggyback Registration such Registrable
Securities for which the Company has received written requests for
inclusion within three (3) Business Days (or within one (1)
Business Day in the case of an “overnight” offering or
“bought deal”) after sending the Piggyback Notice,
provided that such
written request sets forth such information regarding the Selling
Stockholder as is required to be disclosed in connection with the
offering (and any related registration, if applicable) pursuant to
Regulation S-K promulgated under the Securities Act.
(ii) If
a Holder decides not to include for registration in an offering
contemplated by this Section 2(c) (and any related
registration, if applicable) such Holder’s Registrable
Securities following the receipt of a Piggyback Notice, such Holder
shall nevertheless continue to have the right to include any of
such Holder’s Registrable Securities in any subsequent
offering contemplated by this Section 2(c) (and any related
registration, if applicable) in accordance with this Section 2(c).
(iii) If
the managing underwriter or managing underwriters of an
Underwritten Offering advise the Company and the Holders that in
their reasonable opinion that the inclusion of all of the
Registrable Securities requested for inclusion in an Underwritten
Offering (other than a Requested Underwritten Offering) would
likely have an adverse effect on the price, timing, marketing or
distribution of Common Stock proposed to be included in such
offering, the Company shall include in such Underwritten Offering
only that number of shares of Common Stock proposed to be included
in such Underwritten Offering that, in the reasonable opinion of
the managing underwriter or managing underwriters, will not have
such effect, with such number to be allocated as follows:
(A) first, to the Company, (B) second, if there remains
availability for additional shares of Common Stock to be included
in such Underwritten Offering following the allocation to the
Company under (A), pro rata
among the Parties (other than the Company) that (prior to any
cutback) would participate in such Underwritten Offering based on
the relative number of Registrable Securities that would be held by
each such Party following any related resale distribution, if any,
and (C) if there remains availability for additional shares of
Common Stock to be included in such registration following the
allocation to the Parties under (B), third pro rata among all other Persons
holding Common Stock who may be seeking to register such Common
Stock pursuant to incidental or piggyback registration rights based
on the number of Common Stock such Person is entitled to include in
such registration.
(iv) Any
Holder or Limited Partner shall have the right to withdraw all or
part of its request for inclusion of its Registrable Securities in
a Piggyback Registration by giving written notice to the Company of
its request to withdraw; provided, however, that (i) such
request must be made in writing prior to the effectiveness of such
Registration Statement and (ii) such withdrawal shall be
irrevocable and, after making such withdrawal, a Holder or Limited
Partner shall no longer have any right to include Registrable
Securities in the Piggyback Registration as to which such
withdrawal was made.
(v) The Company shall
have the right to terminate or suspend any registered offering as
to which Holders have a right to a Piggyback Registration pursuant
to this Section
2(c) (other than any registered offering initiated by a
Holder pursuant to Section
2(a) or 2(b)) at any time in its sole discretion, and
without any obligation to any Party (whether or not such Party has
elected to exercise its right to a Piggyback Registration pursuant
to this Section
2(c)).
3. Registration
and Underwritten Offering Procedures.
The
procedures to be followed by the Company and each Selling
Stockholder electing to sell Registrable Securities in a
Registration Statement pursuant to this Agreement, and the
respective rights and obligations of the Company and such Selling
Stockholders with respect to the preparation, filing and
effectiveness of such Registration Statement and the effectuation
of any Underwritten Offering, are as follows:
(a) in connection with
a Demand Registration, the Company will, at least three (3)
Business Days prior to the anticipated filing of the Registration
Statement and any related Prospectus or any amendment or supplement
thereto (other than, after effectiveness of the Registration
Statement, any filing made under the Exchange Act that is
incorporated by reference into the Registration Statement),
(i) furnish to such Selling Stockholders copies of all such
documents prior to filing and (ii) use commercially reasonable
efforts to address in each such document when so filed with the
Commission such comments as such Selling Stockholders reasonably
shall propose prior to the filing thereof.
(b) in connection with
a Piggyback Registration or a Requested Underwritten Offering, the
Company will, at least three (3) Business Days prior to the
anticipated filing of any initial Registration Statement that
identifies the Selling Stockholders and any related Prospectus or
any amendment or supplement thereto (other than amendments and
supplements that do not materially alter the previous disclosure or
do nothing more than name the Selling Stockholders and provide
information with respect thereto), as applicable, (i) furnish
to such Selling Stockholders copies of any such Registration
Statement or related Prospectus or amendment or supplement thereto
that identify the Selling Stockholder and any related Prospectus or
any amendment or supplement thereto (other than amendments and
supplements that do not materially alter the previous disclosure or
do nothing more than name Selling Stockholders and provide
information with respect thereto) prior to filing and (ii) use
commercially reasonable efforts to address in each such document
when so filed with the Commission such comments as such Selling
Stockholders reasonably shall propose prior to the filing
thereof.
(c) The Company will
use commercially reasonable efforts to as promptly as reasonably
practicable (i) prepare and file with the Commission such
amendments, including post-effective amendments, and supplements to
each Registration Statement and the Prospectus used in connection
therewith as may be necessary under applicable law to keep such
Registration Statement continuously effective with respect to the
disposition of all Registrable Securities covered thereby during
the Effectiveness Period; (ii) cause the related Prospectus to
be amended or supplemented by any required prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424;
and (iii) respond to any comments received from the Commission
with respect to each Registration Statement or any amendment
thereto and, as promptly as reasonably practicable provide such
Selling Stockholders true and complete copies of all correspondence
from and to the Commission relating to such Registration Statement
that pertains to such Selling Stockholders as selling stockholders
but not any comments that would result in the disclosure to such
Selling Stockholders of material and non-public information
concerning the Company.
(d) The Company will
comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the
Registration Statements and the disposition of all Registrable
Securities covered by each Registration Statement.
(e) The Company will
notify such Selling Stockholders who are included in a Registration
Statement as promptly as reasonably practicable: (i)(A) when a
Prospectus or any prospectus supplement or post-effective amendment
to a Registration Statement in which such Selling Stockholder is
included has been filed; (B) when the Commission notifies the
Company whether there will be a “review” of the
applicable Registration Statement and whenever the Commission
comments in writing on such Registration Statement (in which case
the Company shall provide true and complete copies thereof and all
written responses thereto to each of such Selling Stockholders that
pertain to such Selling Stockholders as selling stockholders); and
(C) with respect to each applicable Registration Statement or
any post-effective amendment thereto, when the same has been
declared effective; (ii) of any request by the Commission or
any other federal or state governmental authority for amendments or
supplements to such Registration Statement or Prospectus or for
additional information that pertains to such Selling Stockholders
as sellers of Registrable Securities; (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of
such Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding
for such purpose; and (v) of the occurrence of any event or
passage of time that makes any statement made in such Registration
Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect
or that requires any revisions to such Registration Statement,
Prospectus or other documents so that, in the case of such
Registration Statement or the Prospectus, as the case may be, it
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading (provided, however, that no notice by the
Company shall be required pursuant to this clause (v) in the
event that the Company either promptly files a prospectus
supplement to update the Prospectus or a Form 8-K or other
appropriate Exchange Act report that is incorporated by reference
into the Registration Statement, which in either case, contains the
requisite information that results in such Registration Statement
no longer containing any untrue statement of material fact or
omitting to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading).
(f) The Company will
use commercially reasonable efforts to avoid the issuance of or, if
issued, obtain the withdrawal of (i) any order suspending the
effectiveness of a Registration Statement, or (ii) any
suspension of the qualification (or exemption from qualification)
of any of the Registrable Securities for sale in any jurisdiction,
as promptly as reasonably practicable, or if any such order or
suspension is made effective during any Blackout Period or
Suspension Period, as promptly as reasonably practicable after such
Blackout Period or Suspension Period is over.
(g) During the
Effectiveness Period, the Company will furnish to each Selling
Stockholder, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto and all exhibits
to the extent requested by such Selling Stockholder (including
those incorporated by reference) promptly after the filing of such
documents with the Commission; provided, however, that the Company will
not have any obligation to provide any document pursuant to this
clause that is available on the Commission’s EDGAR
system.
(h) The Company will
promptly deliver to each Selling Stockholder, without charge, as
many copies of each Prospectus or Prospectuses (including each form
of prospectus) authorized by the Company for use and each amendment
or supplement thereto as such Selling Stockholder may reasonably
request during the Effectiveness Period. Subject to the terms of
this Agreement, including Section 3(o), the Company
consents to the use of such Prospectus and each amendment or
supplement thereto by each of the Selling Stockholders in
connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement
thereto.
(i) The Company will
cooperate with such Selling Stockholders to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free of all
restrictive legends indicating that the Registrable Securities are
unregistered or unqualified for resale under the Securities Act,
Exchange Act or other applicable securities laws, and to enable
such Registrable Securities to be in such denominations and
registered in such names as any such Selling Stockholder may
request in writing. In connection therewith, if required by the
Company’s transfer agent, the Company will promptly, after
the Effective Date of the Registration Statement, cause an opinion
of counsel as to the effectiveness of the Registration Statement to
be delivered to and maintained with its transfer agent, together
with any other authorizations, certificates and directions required
by the transfer agent which authorize and direct the transfer agent
to issue such Registrable Securities without any such legend upon
sale by the Selling Stockholder of such Registrable Securities
under the Registration Statement.
(j) Upon the occurrence
of any event contemplated by Section 3(e)(v), as promptly as
reasonably practicable, the Company will prepare a supplement or
amendment, including a post-effective amendment, if required by
applicable law, to the affected Registration Statement or a
supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, no
Registration Statement nor any Prospectus will contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(k) In connection with
any Requested Underwritten Offering, the Company will use
commercially reasonable efforts to cause appropriate officers and
employees to be available, on a customary basis and upon reasonable
notice, to meet with prospective investors in presentations,
meetings and “road shows.”
(l) With respect to
Underwritten Offerings, (i) the right of any Selling
Stockholder to include such Selling Stockholder’s Registrable
Securities in an Underwritten Offering shall be conditioned upon
such Selling Stockholder’s participation in such underwriting
and the inclusion of such Selling Stockholder’s Registrable
Securities in the underwriting to the extent provided herein,
(ii) each Selling Stockholder participating in such
Underwritten Offering agrees to enter into an underwriting
agreement in customary form and sell such Selling
Stockholder’s Registrable Securities on the basis provided in
any underwriting arrangements approved by the Persons entitled to
select the managing underwriter or managing underwriters hereunder
and (iii) each Selling Stockholder participating in such
Underwritten Offering agrees to complete and execute all
questionnaires, powers of attorney, indemnities, custody
agreements, lock-ups, “hold back” agreements, and other
documents reasonably required under the terms of such underwriting
arrangements. The Company hereby agrees with each Selling
Stockholder that, in connection with any Underwritten Offering in
accordance with the terms hereof, it will negotiate in good faith
and execute all customary indemnities, underwriting agreements and
other documents reasonably required under the terms of such
underwriting arrangements, including using all commercially
reasonable efforts to procure customary legal opinions and auditor
“comfort” letters. In the event such Selling
Stockholders seek to complete an Underwritten Offering, for a
reasonable period prior to the filing of any Registration Statement
and throughout the Effectiveness Period, the Company will make
available upon reasonable notice at the Company’s principal
place of business or such other reasonable place for inspection
during normal business hours by the managing underwriter or
managing underwriters selected in accordance with this Section 3(l) such financial and
other information and books and records of the Company
(collectively, the “Records”),
and cause the officers, employees, counsel and independent
certified public accountants of the Company to respond to such
inquiries, as shall be reasonably necessary (and in the case of
counsel, not violate an attorney-client privilege in such
counsel’s reasonable belief) to conduct a reasonable
investigation within the meaning of Section 11 of the Securities
Act; provided,
however, that,
unless the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in the Registration Statement or
the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, the Company
shall not be required to provide any Records under this
Section 3(l) if (i)
the Company believes, after consultation with counsel for the
Company, that to do so would cause the Company to forfeit an
attorney-client privilege that was applicable to such Records, or
(ii) if either (A) the Company has requested and been granted from
the Commission confidential treatment of such Records contained in
any filing with the Commission or documents provided supplementally
or otherwise or (B) the Company reasonably determines in good faith
that such Records are confidential and so notifies the Person so
inspecting in writing, unless prior to furnishing any such Records
with respect to clause (ii) such Person requesting such Records
agrees to enter into a confidentiality agreement in customary form
and subject to customary exceptions; and provided, further, that each Party agrees
that it shall, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at its expense, to undertake
appropriate action and to prevent disclosure of the Records deemed
confidential.
(m) Each Selling
Stockholder agrees to furnish to the Company any other information
regarding the Selling Stockholder and the distribution of such
securities as the Company reasonably determines is required to be
included in any Registration Statement or any prospectus or
prospectus supplement relating to an Underwritten
Offering.
(n) Notwithstanding any
other provision of this Agreement, the Company shall not be
required to file a Registration Statement (or any amendment
thereto) or effect a Requested Underwritten Offering (or, if the
Company has filed a Shelf Registration Statement and has included
Registrable Securities therein, the Company shall be entitled to
suspend the offer and sale of Registrable Securities pursuant to
such Registration Statement) for a period of up to 120 days, if
(A) the Board determines that a postponement is in the best
interest of the Company and its stockholders generally due to a
pending transaction involving the Company (including a pending
securities offering by the Company, or any proposed financing,
acquisition, merger, tender offer, business combination, corporate
reorganization, consolidation or other significant transaction
involving the Company), (B) the Board determines such
registration would render the Company unable to comply with
applicable securities laws, (C) the Board determines such
registration would require disclosure of material information that
the Company has a bona fide business purpose for preserving as
confidential, or (D) audited financial statements as of a date
other than the fiscal year end of the Company would be required to
be prepared (any such period, a “Blackout
Period”); provided, however, that in no event shall
any Blackout Period together with any Suspension Period
collectively exceed an aggregate of 120 days in any 12 month
period. In addition, if the Company receives a Demand Notice and
the Company is then in the process of preparing to engage in a
public offering, the Company shall inform the Initiating Holders of
the Company’s intent to engage in a public offering and may
require the Initiating Holders to withdraw the Demand Notice for a
period of up to one hundred twenty (120) days so that the Company
may complete its public offering. In the event that the Company
ceases to pursue such public offering, it shall promptly inform the
Initiating Holders, and the Initiating Holders shall be permitted
to submit a new Demand Notice.
(o) Discontinued Disposition. Each
Selling Stockholder agrees that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in
clauses (ii) through (v) of Section 3(e), such Selling
Stockholder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such
Selling Stockholder’s receipt of the copies of the
supplemental Prospectus or amended Registration Statement as
contemplated by Section
3(j) or until it is advised in writing by the Company that
the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in
such Prospectus or Registration Statement (a “Suspension
Period”). During any Suspension Period, if so directed
by the Company, such Selling Stockholder must deliver to the
Company all copies in its possession, other than permanent file
copies then in the Selling Stockholder’s possession, of the
Prospectus covering such Registrable Shares current at the time of
receipt of such notice, and shall keep the information contained in
such, as well as any knowledge related to the reason for the
Suspension Period, confidential. The Company may provide
appropriate stop orders to enforce the provisions of this
Section
3(o).
(p) Except as otherwise
specifically provided in this Agreement, in all offerings of the
Company’s securities the Company shall have sole discretion
to select the underwriters.
4. No
Inconsistent Agreements. The Company shall not hereafter
enter into, and is not currently a party to, any agreement with
respect to its securities that is inconsistent in any material
respect with the rights granted to the Parties by this
Agreement.
5. Registration
Expenses. All Registration Expenses incident to the
Company’s performance of or compliance with its obligations
under this Agreement shall be borne by the Company, whether or not
any Registrable Securities are sold pursuant to a Registration
Statement. In addition, the Company shall be responsible for all of
its expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including expenses
payable to third parties and including all salaries and expenses of
its officers and employees performing legal or accounting duties),
the expense of any annual audit and the fees and expenses incurred
in connection with the listing of the Registrable Securities on the
Trading Market. The Company shall not be required to pay any
Selling Expenses, fees of any counsel retained by any underwriter
with respect to any Requested Underwritten Offering, or any other
expenses of the Parties (other than the Company) not specifically
required to be paid pursuant to this Section 5.
6. Indemnification.
(a) The Company shall
indemnify and hold harmless each Selling Stockholder whose
Registrable Securities are covered by a Registration Statement,
each Person who controls such Selling Stockholder (within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), and each of their respective officers and directors
and any agent thereof (collectively, “Selling Stockholder
Indemnified Persons”), to the fullest extent permitted
by applicable law, from and against any and all losses, claims,
damages, liabilities, joint or several, costs (including reasonable
costs of preparation and reasonable attorneys’ fees) and
expenses, judgments, fines, penalties, interest, settlements or
other amounts arising from any and all claims, demands, actions,
suits or proceedings, whether civil, criminal, administrative or
investigative, in which any Selling Stockholder Indemnified Person
may be involved, or is threatened to be involved, as a party or
otherwise, under the Securities Act or otherwise (collectively,
“Losses”),
as incurred, arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in any Registration
Statement under which any Registrable Securities of such Selling
Stockholder were registered, in any related preliminary prospectus
(if the Company authorized the use of such preliminary prospectus
prior to the Effective Date), or in any related summary or final
prospectus or free writing prospectus (if such free writing
prospectus was authorized for use by the Company) or in any
amendment or supplement thereto (if used during the period the
Company is required to keep the Registration Statement current), or
arising out of, based upon or resulting from the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein, in
the light of the circumstances in which they were made, not
misleading; provided, however, that the Company shall
not be liable to any Selling Stockholder Indemnified Person to the
extent that any such claim arises out of, is based upon or results
from: (i) an untrue or alleged untrue statement or omission or
alleged omission made in such Registration Statement, such
preliminary, summary or final prospectus or free writing prospectus
or such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by or on behalf
of such Selling Stockholder Indemnified Person or any underwriter
specifically for use in the preparation thereof; or (ii) any sales
by a Selling Stockholder after the delivery by the Company to such
Selling Stockholder of written notice of a Suspension Period and
before the written confirmation by the Company that sales may be
resumed. The Company shall notify the Selling Stockholders promptly
of the institution, threat or assertion of any Proceeding of which
the Company is aware in connection with the transactions
contemplated by this Agreement. This indemnity shall be in addition
to any liability the Company may otherwise have.
(b) In connection with
any Registration Statement in which a Selling Stockholder
participates, all such participating Selling Stockholders shall,
severally and not jointly, indemnify and hold harmless the Company,
each Person who controls the Company (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act), and
each of their respective officers, directors and any agent thereof
to the fullest extent permitted by applicable law, from and against
any and all Losses as incurred, arising out of or relating to (i)
any untrue or alleged untrue statement of a material fact contained
in any such Registration Statement, in any preliminary prospectus
(if used prior to the Effective Date of such Registration
Statement), or in any summary or final prospectus or free writing
prospectus or in any amendment or supplement thereto (if used
during the period the Company is required to keep the Registration
Statement current), or arising out of, based upon or resulting from
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances in which they were
made, not misleading, but only to the extent that the same are made
in reliance and in conformity with information relating to the
Selling Stockholder furnished in writing to the Company by or on
behalf of such Selling Stockholder for use therein and (ii) any
sales by such Selling Stockholders after the delivery by the
Company to such Selling Stockholders of written notice of a
Suspension Period and before the written confirmation by the
Company that sales may be resumed. This indemnity shall be in
addition to any liability such Selling Stockholder may otherwise
have. In no event shall the liability of any Selling Stockholder
hereunder be greater in amount than the dollar amount of the
proceeds received by such Selling Stockholder under the sale of the
Registrable Securities giving rise to such indemnification
obligation, except in the case of fraud or willful misconduct by
such Selling Stockholder.
(c) Any Person entitled
to indemnification hereunder shall (i) give prompt written
notice to the indemnifying party of any claim with respect to which
it seeks indemnification and (ii) unless in such indemnified
party’s reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to
such claim or there may be reasonable defenses available to the
indemnified party that are different from or additional to those
available to the indemnifying party, permit such indemnifying party
to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim
shall not be obligated to pay the fees and expenses of more than
one counsel (in addition to any local counsel) for all parties
indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party there
may be one or more legal or equitable defenses available to such
indemnified party that are in addition to or may conflict with
those available to another indemnified party with respect to such
claim. The delay or failure to give prompt written notice shall not
release the indemnifying party from its obligations hereunder
except to the extent that the indemnifying party has been
prejudiced by such delay or failure. An indemnifying party shall
not be liable for any settlement effected by the indemnified party
without the written consent of such indemnifying
party.
(d) If the
indemnification provided for in this Section 6 is held by a court of
competent jurisdiction to be unavailable to an indemnified party
with respect to any Losses referred to herein, the indemnifying
party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of
such Losses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and of
the indemnified party, on the other, in connection with the untrue
or alleged untrue statement of a material fact or the omission to
state a material fact that resulted in such Losses, as well as any
other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined
by a court of law by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied
by the indemnifying party or by the indemnified party and the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission;
provided,
however, that in no
event shall any contribution by a Selling Stockholder hereunder
exceed the net proceeds from the offering received by such Selling
Stockholder.
7. Facilitation
of Sales Pursuant to Rule 144. For so
long as the Company is subject to the reporting requirements of
Sections 13 or 15(d) of the Exchange Act, the Company shall (i)
timely file the reports required to be filed by it under the
Exchange Act or the Securities Act (including the reports under
Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144), and (ii) take such further action
as any Holder may reasonably request, all to the extent required
from time to time to enable the Holders to sell Registrable
Securities without registration under the Securities Act within the
limitations of the exemption provided by Rule 144. Upon the
request of any Holder in connection with that Holder’s sale
pursuant to Rule 144, the Company shall deliver to such Holder a
written statement as to whether it has complied with such
requirements.
8. Duration
of Agreement. This
Agreement shall terminate and be of no further force or effect when
there shall no longer be any Registrable Securities outstanding;
provided,
however, that the
Company’s and any Selling Stockholder’s obligations
under Section 6
shall survive such termination.
9. Uplisting.
The Company agrees to take such steps as are commercially
reasonable in order for the Company to meet the listing
requirements of the Nasdaq Capital Market and, if such listing
requirements are met, to list the Common Stock on the Nasdaq
Capital Market.
10. Miscellaneous.
(a) Remedies. In the event of a
breach by the Company of any of its obligations under this
Agreement, each Holder, in addition to being entitled to exercise
all rights granted by law and under this Agreement, including
recovery of damages, will be entitled to specific performance of
its rights under this Agreement. The Company agrees that monetary
damages would not provide adequate compensation for any losses
incurred by reason of a breach by it of any of the provisions of
this Agreement and further agrees that, in the event of any action
for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(b) Amendments and Waivers. No
provision of this Agreement may be waived or amended except in a
written instrument signed, in the case of an amendment, by the
Company and Investors holding a majority in interest of the
Registrable Securities then outstanding or, in the case of a
waiver, by the party against whom enforcement of any such waived
provision is sought, provided that if any amendment, modification
or waiver disproportionately and adversely impacts an Investor (or
group of Investors), the consent of such disproportionately
impacted Investor (or group of Investors) shall also be required.
The Company shall provide prior notice to all Parties of any
proposed waiver or amendment. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of
any Party to exercise any right hereunder in any manner impair the
exercise of any such right. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions of this Agreement with
respect to a matter that relates exclusively to the rights of
Selling Stockholders whose Registrable Securities are being sold
pursuant to a Registration Statement and that does not materially
adversely affect the rights of other Parties may be given by
Selling Stockholders selling of a majority of the Registrable
Securities being sold pursuant to such Registration Statement. Any
amendment effected in accordance with accordance with this Section
10(b) shall be binding upon each Investor and holder of Registrable
Securities and the Company.
(c) Notices. Any and all notices or
other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission,
if such notice or communication is delivered via facsimile or
electronic mail as specified in this Section 10(c) prior to 5:00
p.m. Eastern Time on a Business Day, (ii) the Business Day
after the date of transmission, if such notice or communication is
delivered via facsimile or electronic mail as specified in this
Agreement later than 5:00 p.m. Eastern Time on any date and earlier
than 11:59 p.m. Eastern Time on such date, (iii) the Business
Day following the date of mailing, if sent by nationally recognized
overnight courier service, (iv) the date of delivery, if delivered
personally, or (v) upon actual receipt by the Party to whom
such notice is required to be given. The contact information for
such notices and communications shall be as set forth on the
signature pages hereto (or as any such party may designate by
written notice to the other parties in accordance with this
Section
10(c)).
(d) Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the
Parties and their respective heirs, executors, administrators,
successors, legal representatives and permitted assigns. Except as
provided in this Section
10(d), this Agreement, and any rights or obligations
hereunder, may not be assigned without the prior written consent of
the Company. Notwithstanding anything in the foregoing to the
contrary, the registration rights of any of the Investors pursuant
to this Agreement with respect to all or any portion of its
Registrable Securities may be assigned without such consent (but
only with all related obligations) with respect to such Registrable
Securities by such Party to a transferee of not less than 200,000
of such Registrable Securities (adjusted for any stock split, stock
dividend, reverse stock split or similar change in the Common Stock
after the date of this Agreement); provided (i) the Company
is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or
assignee and the Registrable Securities with respect to which such
registration rights are being assigned and (ii) such
transferee or assignee agrees in writing to be bound by and subject
to the terms set forth in this Agreement. The Company may not
assign its rights or obligations hereunder without the prior
written consent of the Holders.
(e) No Third Party Beneficiaries.
Nothing in this Agreement, whether express or implied, shall be
construed to give any Person, other than the parties hereto or
their respective successors and permitted assigns, any legal or
equitable right, remedy, claim or benefit under or in respect of
this Agreement.
(f) Execution and Counterparts.
This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and all
of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by
facsimile or electronic mail transmission, such signature shall
create a valid binding obligation of the Party executing (or on
whose behalf such signature is executed) the same with the same
force and effect as if such signature delivered by facsimile or
electronic mail transmission were the original
thereof.
(g) Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial. This Agreement shall be
governed by, and construed in accordance with, the internal laws of
the State of New York, without giving effect to its choice of law
or conflict of law provisions or rules. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York over any suit,
action, or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served
on each Party anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of
the Parties irrevocably waives any objection to the laying of venue
of any such suit, action or proceeding brought in such courts and
irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an
inconvenient forum. Each of the Parties agrees that a judgment in
any such suit, action or proceeding may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. EACH OF THE
PARTIES HEREBY IRREVOCABLY WAIVES ANY RIGHT TO REQUEST A TRIAL BY
JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.
(h) Cumulative Remedies. The
remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
(i) Headings. The section and
paragraph headings contained in this Agreement are for reference
purposes only and should not affect in any way the meaning or
interpretation of this Agreement.
(j) Severability. If any term,
provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated,
and the Parties shall use their reasonable efforts to find and
employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be
the intention of the Parties that they would have executed the
remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(k) Entire Agreement. This
Agreement constitutes the entire agreement among the Parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous contracts, agreements and understandings with
respect to the subject matter hereof and the matters addressed or
governed hereby, whether oral or written.
[SIGNATURE
PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties have
executed this Agreement as of the date first written
above.
|
|
SCIENTIFIC INDUSTRIES, INCBy:
________________________________Name: Title:
Information for Notice:
Scientific
Industries, Inc.80 Orville Drive, Suite 102Bohemia, NY
11716Attention: Helena SantosFax: Electronic mail:
hsantos@scientificindustries.com
With a
copy to:Reitler Kailas & Rosenblatt
885 3rd
Ave, 20th FloorNew York, NY 10022
Attention:
John F.F. Watkins, Esq.Fax: (212) 371-5500Electronic mail:
jwatkins@reitlerlaw.com
|
List of
Investors
[TBU]
28 APRIL 2021
AGREEMENT ON THE SALE AND TRANSFER OF ALL SHARES IN
AQUILA BIOLABS GMBH
(Vertrag über den Kauf und die Abtretung aller
Geschäftsanteile an der
aquila biolabs GmbH)
between
JENS BAYER
KONRAD HERZOG
DAVID FRANK
DANIEL GRÜNES
SEED FONDS II FÜR DIE REGION AACHEN GMBH & CO.
KG
KFW ANSTALT DES ÖFFENTLICHEN RECHTS
SCIENCE HOLDING GMBH
PROF. DR. ROBERT HUBER
as
Sellers
and
SCIENTIFIC BIOPROCESSING HOLDINGS, INC.
as
Buyer
STRICTLY PRIVATE AND CONFIDENTIAL
CONTENTS
CLAUSE PAGE
1.
Defined Terms and
Interpretation 7
2.
Sale and Transfer of
Shares 12
3.
Sale and Transfer of Convertible Loan
Receivables 14
6.
Payment of Purchase Price;
Escrow 19
9.
Sellers' Warranties 21
10.
Breach of Sellers'
Warranties 35
11.
Limitation of Sellers'
Liability 36
13.
Buyer's Warranties 40
15.
Non-Compete,
Non-Solicitation 42
17.
Payments; No Set-off or Retention; Default
Interest 43
18.
Costs and Expenses 44
19.
Confidentiality,
Announcements 45
20.
Notices and
Communications 47
22.
Amendment or Variation 49
23.
Sellers' Declaration of
Approval 49
24.
Power of Attorney in Favour of Buyer and
Sellers 49
28.
Governing Law and
Jurisdiction 51
THIS AGREEMENT ("Agreement") is dated 26 April 2021
("Signing Date") and
made
BETWEEN:
(1)
Mr Jens Bayer, born 7 February 1988,
resident at Scheffelstraße 13, 50935
Cologne, Germany
–
referred to as "Seller 1" –
(2)
Mr Konrad Herzog, born 26 March 1988,
resident at An Gut
Forensberg 2A, 52134 Herzogenrath, Germany
–
referred to as "Seller 2" –
(3)
Mr David Frank, born 28 October 1987,
resident at Martin-Niemöller-Straße 6, 52134
Herzogenrath, Germany
–
referred to as "Seller 3"
–
(4)
Mr Daniel Grünes, born 17 December
1987, resident at Scheffelstraße 13, 50935
Cologne, Germany
–
referred to as "Seller 4"
–
(1)
Seed Fonds II für die Region Aachen GmbH
& Co. KG, a limited partnership registered with the
Local Court (Amtsgericht)
of Aachen under registration number HRA 8071, with its registered
office address at Markt 45-47, 52062 Aachen, Germany
–
referred to as "Seller 5"
–
(2)
KfW Anstalt des öffentlichen
Rechts, a public institution with its registered office
address at Ludwig-Erhard-Platz 1, 53179 Bonn, Germany
–
referred to as "Seller 6"
–
(3)
Science Holding GmbH, a limited
liability company registered with the Local Court (Amtsgericht) of Munich under
registration number HRB 226852, with its registered office address
at Wartaweil 14, 82211 Herrsching am Ammersee, Landkreis Starnberg,
Germany
–
referred to as "Seller 7"
–
(4)
Prof. Dr
Robert Huber, born 21
September 1976, resident at Martin-Greif-Straße 9, 83080
Oberaudorf, Germany
–
referred to as "Seller 8"
–
and
(5)
Scientific Bioprocessing Holdings, Inc.,
a company incorporated under the laws of the State of Delaware
under registration number 5847011, with registered office
address at 84 Orville Drive, #102, Bohemia New York 11716,
U.S.A.
–
referred to as "Buyer"
–
Seller 1 to
Seller 8 are also referred to collectively as the
"Sellers" and each as a
"Seller", the Sellers and
the Buyer are also referred to collectively as the "Parties" and individually as a
"Party".
BACKGROUND
(A)
The Sellers are
the sole shareholders of aquila biolabs GmbH, a German limited
liability company registered with the Local Court (Amtsgericht) of Aachen under
registration number HRB 19240, with its registered office
address at Arnold-Sommerfeld-Ring 2, 52499 Baesweiler, Germany
("Company"), further details
of which are set out in Exhibit (A).
The registered share capital of the Company amounts to
EUR 58,480.00 (in words: fifty-eight thousand four hundred and
eighty Euro) and is divided into 58,480 shares with a nominal
amount of EUR 1.00 (in words: one Euro) each.
(B)
The Sellers hold
the following shares in the Company:
a)
Seller 1 holds
6,250 (in words: six thousand two hundred and fifty) shares
(consecutive numbers No. 1 to 6,250) with a nominal value of EUR
1.00 (in words: one Euro) each, amounting to a share capital in the
total nominal amount of EUR 6,250.00 (in words: six thousand
two hundred and fifty Euro) (together: "Seller 1 Shares"). Accordingly, Seller
1's participation quota in the Company's entire share capital
amounts to 10.6875%;
b)
Seller 2 holds
6,250 (in words: six thousand two hundred and fifty) shares
(consecutive numbers No. 6,251 to 12,500) with a nominal value of
EUR 1.00 (in words: one Euro) each, amounting to a share
capital in the total nominal amount of EUR 6,250.00 (in words:
six thousand two hundred and fifty Euro) (together: "Seller 2 Shares"). Accordingly, Seller
2's participation quota in the Company's entire share capital
amounts to 10.6875%;
c)
Seller 3 holds
6,250 (in words: six thousand two hundred and fifty) shares
(consecutive numbers No. 12,501 to 18,750) with a nominal value of
EUR 1.00 (in words: one Euro) each, amounting to a share
capital in the total nominal amount of EUR 6,250.00 (in words:
six thousand two hundred and fifty Euro) (together: "Seller 3 Shares"). Accordingly, Seller
3's participation quota in the Company's entire share capital
amounts to 10.6875%;
d)
Seller 4 holds
6,250 (in words: six thousand two hundred and fifty) shares
(consecutive numbers No. 18,751 to 25,000) with a nominal value of
EUR 1.00 (in words: one Euro) each, amounting to a share
capital in the total nominal amount of EUR 6,250.00 (in words: six
thousand two hundred and fifty Euro) (together: "Seller 4 Shares"). Accordingly, Seller
4's participation quota in the Company's entire share capital
amounts to 10.6875%;
e)
Seller 5 holds
7,000 (in words: seven thousand) shares (consecutive numbers No.
25,001 to 32,000) with a nominal value of EUR 1.00 each, amounting
to a share capital in the total nominal amount of EUR 7,000.00 (in
words: seven thousand Euro) and 3,944 (in words three thousand nine
hundred forty-four) shares (consecutive numbers No. 47,601 to
51,544) with a nominal value of EUR 1.00 (in words: one Euro) each,
amounting to a share capital in the total nominal amount of EUR
3,944.00 (in words: three thousand nine hundred forty-four
Euro) (together: "Seller 5
Shares"). Accordingly, Seller 5's participation quota in the
Company's entire share capital amounts to a total of
18.71424%;
f)
Seller 6 holds
7,000 (in words: seven thousand) shares (consecutive numbers No.
32,001 to 39,000) with a nominal value of EUR 1.00 each, amounting
to a share capital in the total nominal amount of EUR 7,000.00 (in
words: seven thousand Euro) and 3,944 (in words three thousand nine
hundred forty-four) shares (consecutive numbers No. 51,545 to
55,488) with a nominal value of EUR 1.00 (in words: one Euro) each,
amounting to a share capital in the total nominal amount of EUR
3,944.00 (in words: three thousand nine hundred forty-four
Euro) (together: "Seller 6
Shares"). Accordingly, Seller 6's participation quota in the
Company's entire share capital amounts to a total of
18.71424%;
g)
Seller 7 holds
8,000 (in words: eight thousand) shares (consecutive numbers No.
39,001 to 47,000) with a nominal value of EUR 1.00 (in words: one
Euro) each, amounting to a share capital in the total nominal
amount of EUR 8,000.00 (in words: eight thousand Euro) and 2,992
(in words two thousand nine hundred ninety-two) shares (consecutive
numbers No. 55,489 to 58,480) with a nominal value of EUR 1.00
each, amounting to a share capital in the total nominal amount of
EUR 2,992.00 (in words: two thousand nine hundred
ninety-two Euro) (together: "Seller
7 Shares"). Accordingly, Seller 7's participation quota in
the Company's entire share capital amounts to a total of 18.79632%;
and
h)
Seller 8 holds 600
(in words: six hundred) shares (No. 47,001 to 47,600) with a
nominal value of EUR 1.00 (in words: one Euro) each, amounting to a
share capital in the total nominal amount of EUR 600.00 (in words:
six hundred Euro) (together: "Seller 8 Shares"). Accordingly, Seller
8's participation quota in the Company's entire share capital
amounts to 1.026%.
(C)
On 23/25 April
2020, the Company and the Sellers entered into a convertible loan
agreement and subsequently into a prolongation agreement relevant
thereto ("Convertible Loan
Agreement") as set out in Exhibit (C),
based on which Seller 5, Seller 6 and Seller 7 each
granted convertible loans to the Company.
a)
Seller 5 has
outstanding receivables (including any accrued interest) against
the Company under the Convertible Loan Agreement in the amount of
EUR 364,661.64 (in words: threehundred sixty-four thousand
sixhundred sixty-one Euro and sixty-four Eurocent);
b)
Seller 6 has
outstanding receivables (including any accrued interest) against
the Company under the Convertible Loan Agreement in the amount of
EUR 364,437.50 (in words: threehundred sixty-four thousand
fourhundred thirty-seven Euro and fifty Eurocent);
c)
Seller 7 has
outstanding receivables (including any accrued interest) against
the Company under the Convertible Loan Agreement in the amount of
EUR 105,017.81 (in words: onehundred five thousand seventeen
Euro and eighty-one Eurocent).
(D)
The Company is
the sole shareholder of aquila biolabs, Inc. with registered office
in Islandia, Suffolk County, New York, U.S.A ("Subsidiary" and together with the
Company, the "Companies").
(E)
The Companies are
active in the business of development, production, marketing and
sale of devices, equipment and software for the analysis,
evaluation and control of fermentation and cell culture processes,
as well as advising companies on the development and optimisation
of such processes ("Business").
(F)
The Sellers
wish to sell and transfer all shares in the Company to the Buyer
and the Buyer wishes to buy and accept the transfer of all shares
subject to the terms of this Agreement (the "Transaction").
(G)
None of the
Companies own any real property.
NOW IT IS AGREED as follows:
1.
DEFINED TERMS AND
INTERPRETATION
In this
Agreement each of the terms listed below has the meaning given to
it directly below or in the part of this Agreement identified
opposite to such term:
|
"Affiliate"
|
Shall
mean affiliated companies in the meaning of §§ 15 et seq.
of the German Stock Corporation Act (AktG) and shall have an equivalent
meaning if the Recipient and/or any of its affiliates are subject
to the laws of a foreign jurisdiction; with respect to
Seller 5 and Seller 6, the term Affiliate shall not
include any portfolio companies.
|
|
"Applicable
Period"
|
|
|
"Agreement"
|
Introductory
Section
|
|
"AO"
|
|
|
"Authority"
|
|
|
"Business"
|
|
|
"Business
Day"
|
|
|
"Buyer"
|
|
|
"Buyer's
Knowledge"
|
|
|
"Buyer's
Warranty/ies"
|
|
|
"Civil
Code"
|
Shall
mean Bürgerliches
Gesetzbuch
|
|
"Claim"
|
|
|
"Closing"
|
|
|
"Closing
Actions"
|
|
|
"Closing
Date"
|
|
|
"Closing
Memorandum"
|
|
|
"Company"
|
|
|
"Companies"
|
|
|
"Confidentiality
Agreement"
|
|
|
"Convertible
Loan Agreement"
|
|
|
"Data
Room"
|
|
|
"Data
Room Stick"
|
|
|
"Default
Interest"
|
|
|
"Effective
Date"
|
|
|
"Escrow
Account"
|
|
|
"Escrow
Agreement"
|
|
|
"Escrow
Amount"
|
|
|
"Exclusive
Intellectual Property"
|
|
|
"Fair"
|
|
|
"Financial
Statements 2020"
|
|
|
"Fundamental
Warranties"
|
|
|
"Information
Technology"
|
|
|
"Insolvency
Code"
|
Shall
mean Insolvenzordnung
|
|
"Intellectual
Property"
|
|
|
"Leakage"
|
|
|
"Leased
Real Properties"
|
|
|
"Legal
Disputes"
|
|
|
"Limitation
Period"
|
|
|
"Limited
Liability Companies Act"
|
Shall
mean Gesetz betreffend die
Gesellschaften mit beschränkter Haftung
|
|
"Material
Agreements"
|
|
|
"Parties"
|
Introductory
Section
|
|
"Party"
|
Introductory
Section
|
|
"Permits"
|
|
|
"Permitted
Leakage"
|
|
|
"Pre-Effective
Date Tax"
|
|
|
"Pre-Effective
Date Tax Period"
|
|
|
"Purchase
Price"
|
|
|
"Qualified
Claim"
|
|
|
"Regulatory
Requirements"
|
|
|
"Relevant
Person"
|
|
|
"Relevant
Tax Matter"
|
|
|
"Relevant
Tax Return"
|
|
|
"Representatives"
|
Shall
mean, in relation to any person, its directors, officers,
authorised persons, employees, agents, consultants and professional
advisors.
|
|
"SEC"
|
Shall
mean the United States Securities and Exchange
Commission
|
|
"Seller"
|
Introductory
Section
|
|
"Seller 1",
"Seller 2",
"Seller 3",
"Seller 4",
"Seller 5",
"Seller 6",
"Seller 7",
"Seller 8"
|
Introductory
Section (1) to (4)
|
|
"Seller 1
Shares", "Seller 2
Shares", "Seller 3
Shares", "Seller 4
Shares", "Seller 5
Shares", "Seller 6
Shares", "Seller 7
Shares", "Seller 8
Shares"
|
|
|
"Sellers'
Account"
|
|
|
"Sellers'
Knowledge"
|
|
|
"Sellers'
Related Party/ies"
|
|
|
"Sellers'
Tax Warranty/ies"
|
|
|
"Sellers'
Warranty/ies"
|
|
|
"Sellers"
|
Introductory
Section
|
|
"Signing
Date"
|
Introductory
Section
|
|
"Sold
CL Receivables"
|
|
|
"Sold CL Receivables Seller 5", "Sold CL Receivables Seller 6",
"Sold CL Receivables
Seller 7"
|
|
|
"Sold
Shares"
|
|
|
"Sold
Shares Seller 1", "Sold
Shares Seller 2", "Sold
Shares Seller 3", "Sold
Shares Seller 4", "Sold
Shares Seller 5", "Sold
Shares Seller 6", "Sold
Shares Seller 7", "Sold
Shares Seller 8"
|
|
|
"Stock
Corporation Act"
|
Shall
mean Aktiengesetz
|
|
"Subsidiary"
|
|
|
"Tax(es)"
|
|
|
"Tax
Authority"
|
|
|
"Tax
Benefits"
|
|
|
"Tax
Claim Notice"
|
|
|
"Tax
Indemnification Claim"
|
|
|
"Tax
Returns"
|
|
|
"Transaction"
|
|
|
"VAT"
|
|
|
"Warranty
Breach"
|
|
(a)
Where any
statement is qualified as being limited by the "Sellers' Knowledge", the statement is
deemed to be given to the actual knowledge (positive Kenntnis) which the persons
identified in Exhibit (a)
had as at the Signing Date or should have had if they were not
acting grossly negligent (grobe
Fahrlässigkeit).
(b)
The table of
contents and headings and sub-headings of this Agreement are for
convenience only and do not affect the construction of this
Agreement.
(c)
Unless the context
requires otherwise, words denoting the singular include the plural
and vice versa and references to any gender include all other
genders. References to any person (which for the purposes of this
Agreement include individuals, bodies corporate, unincorporated
associations, partnerships, governments, governmental agencies and
departments, statutory bodies or other entities, in each case
whether or not having a separate legal personality), include the
person's successors in title and permitted assignees.
(d)
The words "other",
"include", "including" and "in particular" do not connote
limitation in any way.
(e)
References to
recitals, Annexes, Exhibits, clauses and sub-clauses are to
(respectively) recitals to, Annexes to, Exhibits to and clauses and
sub-clauses of this Agreement (unless otherwise specified) and
references within an Annex or Exhibit to paragraphs or annexes
are to paragraphs or annexes of that Annex or Exhibit (unless
otherwise specified).
(f)
Where a German term
has been inserted in italics after an English term, the German term
alone is authoritative for the purpose of interpreting such English
term throughout this Agreement, without regard to any other
interpretation of the English term. If in any jurisdiction other
than the Federal Republic of Germany the meaning and construction
of any English legal term in this Agreement differs from the
meaning and construction of such term under German law, the meaning
and construction under German law prevails, and no reference to any
legal concept under any jurisdiction other than Germany is
construed from the use of any particular English term.
(g)
Unless otherwise
provided for in this Agreement, any reference to "writing" or
"written" includes the text form in accordance with
§ 126b of the Civil Code (Textform).
(h)
References in this
Agreement to dates and times of the day are (unless otherwise
expressly provided) to dates and times in Germany.
(i)
"Authority" means any supranational, EU,
federal, state, municipal, local or other governmental department,
commission, board, bureau, agency or instrumentality, or any
administrative, judicial or arbitration court or panel (for the
avoidance of doubt, including, without limitation, the SEC, the
German Federal Ministry for Economic Affairs and Energy
(Bundeministerium für
Wirtschaft und Energie) and the German Supreme Audit
Institution (Bundesrechnungshof)).
(j)
Any references
in this Agreement to a "Business
Day" are to a day (other than a Saturday or Sunday) when
banks are open for non-automated business to the general public in
Düsseldorf, Germany and in New York, U.S.A.
2
SALE
AND TRANSFER OF SHARES
2.1
Sale of all Shares
in the Company
(a)
Seller 1
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 1 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 1") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(b)
Seller 2
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 2 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 2") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(c)
Seller 3
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 3 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 3") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(d)
Seller 4
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 4 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 4") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(e)
Seller 5
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 5 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 5") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(f)
Seller 6
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 6 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 6") with all rights
and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(g)
Seller 7
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 7 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 7") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(h)
Seller 8
hereby sells to the Buyer on the terms of this Agreement the Seller
8 Shares and all other shares it may hold in the Company
("Sold Shares
Seller 8") with all rights and obligations attaching to
them as from the current year, including the rights to any profits
or dividends
(the
Sold Shares Seller 1, the Sold Shares Seller 2, the Sold
Shares Seller 3, the Sold Shares Seller 4, the Sold Shares Seller
5, the Sold Shares Seller 6, the Sold Shares Seller 7 and the Sold
Shares Seller 8 together the "Sold Shares").
(i)
The Buyer hereby
accepts all sales of all shares in the Company as set out in
Clauses (a) to (h).
(j)
The sales of
shares as set out in Clauses (a)
to (i) shall occur with economic effect
as of 1 January 2021, 00:00 hours ("Effective Date").
(a)
Each of the
Sellers hereby transfers the Sold Shares sold by it to the Buyer
with effect in rem (mit dinglicher
Wirkung) subject to the condition precedent (aufschiebende Bedingung) of the receipt
of the Purchase Price following its payment in accordance with
Clause 6.2.
(b)
The satisfaction of
the conditions precedent in Clause (a) is unrebuttably presumed (unwiderleglich vermutet) for the
purposes of the effectiveness of the transfer of the Sold Shares if
the Parties have jointly signed a Closing Memorandum within the
meaning of Clause 7.3.
(c)
The Buyer hereby
accepts all transfers of all shares as set out above.
(a)
The respective
spouses of Seller 2, Seller 3, and Seller 8 have
consented (eingewilligt) to
the sale and transfer of the Sold Shares sold by the
respective Seller and all other transactions contemplated under
this Agreement by written declarations, copies of which are
attached hereto as Exhibit (a).
Seller 1 and Seller 4 are not married.
(b)
The shareholders'
meeting of the Company has consented to the sale and transfer of
the Sold Shares to the Buyer and the transactions contemplated by
this Agreement. A copy of the shareholders' resolution is attached
for documentation purposes as Exhibit
(b).
3
SALE
AND TRANSFER OF CONVERTIBLE LOAN RECEIVABLES
3.1
Sale of all
Convertible Loan Receivables
(a)
Seller 5
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement with economic effect (mit wirtschaftlicher Wirkung) as of the
Closing Date any receivables and rights Seller 5 may have
under the Convertible Loan Agreement ("Sold CL Receivables
Seller 5");
(b)
Seller 6
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement with economic effect (mit wirtschaftlicher Wirkung) as of the
Closing Date any receivables and rights Seller 6 may have
under the Convertible Loan Agreement ("Sold CL Receivables
Seller 6");
(c)
Seller 7
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement with economic effect (mit wirtschaftlicher Wirkung) as of the
Closing Date any receivables and rights Seller 7 may have
under the Convertible Loan Agreement ("Sold CL Receivables
Seller 7")
(the
receivables and rights sold pursuant to this Clause 3.1 the "Sold
CL Receivables"). The parties confirm that the convertible
loan agreements do not contain a prohibition on the assignment of
the lenders' claims within the meaning of Section 399,
2nd
alternative of the German Civil Code (BGB).
3.2
Transfer of the
Convertible Loan Receivables
(a)
Each of
Seller 5, Seller 6 and Seller 7 hereby transfers the
Sold CL Receivables sold by it to the Buyer with effect
in rem (mit dinglicher Wirkung) subject to the
condition precedent (aufschiebende
Bedingung) of the receipt of the Purchase Price following
its payment in accordance with Clause 6.2.
(b)
The satisfaction of
the conditions precedent in Clause (a) is unrebuttably presumed (unwiderleglich vermutet) for the
purposes of the effectiveness of the transfer of the Sold CL
Receivables if the Parties have jointly signed a Closing Memorandum
within the meaning of Clause 7.3.
(c)
The Buyer hereby
accepts all transfers of all receivables and rights as set out in
this Clause 3.2.
3.3
Termination of the
Convertible Loan Agreement
Prior
to the Closing Date, the parties to the Convertible Loan Agreement
have entered into a termination agreement by which the Convertible
Loan Agreement, except for the claims underlying the Sold CL
Receivables to be sold and transferred under this Agreement, has
been terminated subject to the condition precedent of the
occurrence of Closing.
3.4
Buyer's
Undertakings and Indemnity
(a)
Buyer undertakes
to procure (dafür
einstehen) that, for at least one (1) full year after the
Closing Date, the CL Receivables shall not be repaid by the
Company, in part or in total, to Buyer or to any other person or
entity that acquired (whether by contractual transfer or otherwise)
the CL Receivables. Buyer shall pass on such non-repayment
obligation to any onward (direct or indirect) owner of a
participation in the Companies.
(b)
Buyer shall
indemnify and hold harmless Sellers from and against any and all
losses, liabilities (whether present or future, actual or
contingent), damages and reasonable costs and expenses (including
Taxes, reasonable legal and advisory fees, expenses and
disbursements) arising out of or in connection with any
non-compliance with Clause (a).
The
aggregate total purchase price payable by the Buyer to the Sellers
for all Sold Shares and all Sold CL Receivables ("Purchase Price") is:
EUR 6,499,063.34
(in
words: six million four hundred ninety-nine thousand sixty three
Euro and thirty-four Eurocent).
4.2
Payments made by
the Sellers
Any
payment made by any of the Sellers to the Buyer after Closing
pursuant to this Agreement will be considered an agreed reduction
of the Purchase Price.
The
Parties are of the opinion that the transactions contemplated under
this Agreement do not trigger any German value added tax or any
other taxes of similar nature ("VAT" (Umsatzsteuer)) and that the Purchase
Price is a price net of any VAT. The Sellers undertake not to waive
any applicable VAT exemptions. Notwithstanding the foregoing, the
Parties further agree that, if and to the extent the transactions
contemplated in this Agreement are subject to VAT, such VAT shall
be paid by Buyer in addition to the Purchase Price or other payment
under this Agreement (as applicable) within ten (10) Business Days
after Buyer has received from the Sellers an invoice which complies
with the provisions of Sections 14, 14a German VAT Code
(Umsatzsteuergesetz) (or
applicable provisions in other jurisdictions). Any interest,
penalties or similar charges levied on, or in connection with, VAT,
if any, shall be borne by Buyer.
5.1
Each Seller
hereby warrants as an individual debtor (als Einzelschuldner) (in the form of
independent warranties (selbständige Garantieversprechen)
pursuant to § 311 (1) of the Civil Code) that in the period
from (and including) the Effective Date and up to (and including)
the Signing Date, no Leakage, other than Permitted Leakage, has
occurred with respect to such Seller which has not been remedied at
the costs of the Sellers prior to or on the Signing Date, or will
not have been remedied at the costs of the Sellers prior to the
Closing Date.
5.2
Each Seller
hereby undertakes as an individual debtor (als Einzelschuldner) to procure
(dafür einstehen) that
in the period after (and excluding) the Signing Date and up to (and
including) the Closing Date, no Leakage, other than Permitted
Leakage, will occur with respect to such Seller without the
Buyer’s prior written consent.
(a)
Subject to the
occurrence of Closing, in case of any breach or incorrectness of
the warranties or undertakings given in Clauses 5.1 and 5.2 by a
Seller, such Seller as an individual debtor (als Einzelschuldner) and under
exclusion of any joint and several as well as partial liability
(unter Ausschluss der Gesamt- und
Teilschuld), will compensate the Buyer for any Leakage
(other than Permitted Leakage) directly resulting from such breach
or incorrectness and any Tax resulting from such Leakage, if and to
the extent levied upon the Companies, however net of any actual
monetary gain or other benefit which accrues to Buyer or the
Companies from such Leakage, on a EUR for EUR basis within thirty
(30) Business Days after the Buyer has notified the Sellers that a
Leakage has occurred, specifying in reasonable detail the amount
and the facts and circumstances underlying the Leakage (unless, for
the avoidance of doubt, such Leakage has already been repaid or
reimbursed to the Buyer or the Company prior to such notification
of the Sellers by the Buyer and/or has been reflected in the
Purchase Price calculation). Any compensation claims of the Buyer
under this Clause (a) shall become
time-barred within 12 (twelve) months after the Closing
Date.
(b)
Any amount payable
pursuant to Clause 5.3(a) shall bear
interest at the rate of 5% per
annum for the period from but not including the Closing Date
up to but not including the date payment is received by the Buyer,
calculated on the basis of the actual/actual method, taking into
account the actual number of days lapsed and the actual number of
days of the relevant calendar year.
(a)
any dividend,
withdrawal (Entnahme) or
other form of distribution, whether in cash or in kind, declared,
paid or made by any of the Companies to any Seller;
(b)
the grant of any
loan by any of the Companies to any Seller;
(c)
any repayment of
any shareholder loan or the payment of any interest by any of the
Companies on any shareholder loan granted by any Seller to any of
the Companies;
(d)
any waiver or
release, or commitment to waive or release, by any of the Companies
of any amount or obligation owed or due to it, towards or to the
benefit of any Seller without adequate consideration (ohne angemessene
Gegenleistung);
(e)
any assumption or
grant of any guarantee or security by any of the Companies for any
financial debt owed by a Seller;
(f)
any assumption or
discharge of, or indemnity from, in each case granted by any of the
Companies, any liability (including any recharge of costs of any
kind) owed by a Seller, or a third party for the benefit of any
Seller;
(g)
any payment by any
of the Companies of any advisory, management, transaction or other
fees or expenses, service charges, license or royalty fees to a
Seller;
(h)
any return of
capital (whether by way of a reduction of capital or redemption or
purchase of its own shares or otherwise) to any Seller by any of
the Companies;
(i)
any payment by,
or on the account of, any of the Companies, of any brokerage,
finder's fee, commission, advisory fees or expenses, bonus, extra
compensation, severance payment or other incentive to any third
party (including any Seller) (i) in connection with or in respect
of (a) the preparation, negotiation or execution of this Agreement,
or (b) the preparation and consummation of the Transaction, and
(ii) not addressed in the cost allocation agreement a copy of which
is attached as Exhibit 5.4(i);
(j)
any payment of
bonuses or provision of other benefits by any of the Companies to
any Seller or any officer, director, employee or advisor of any
Seller as well as the payment of any taxes, including wage tax and
social security contributions, in each case to the extent triggered
through (i) the execution of this Agreement, or (ii) the
preparation and consummation of the transaction contemplated by the
Transaction;
(k)
any other
transfer of any asset or right from any of the Companies to any
Seller or to a third party for the benefit of any Seller without
adequate consideration (ohne
angemessene Gegenleistung); or
(l)
any obligation
entered into or accepted by the Companies to do any of the matters
listed in Clauses (a) to (k) in each case irrespective of whether any
performance is made or becomes due prior to or after the Closing
Date.
5.5
"Permitted Leakage" shall mean any
performance of events
(a)
contemplated or
disclosed in, or otherwise in connection with the transactions
under, this Agreement (including its Exhibits and
Annexes);
(b)
made at the request
or with the consent of Buyer;
(c)
required under
existing management service or employment agreements (other than
payments within the meaning of Clause 5.4(j)) or other agreements with the
Sellers;
(d)
required by law,
regulation or order of a competent court or similar
body;
(e)
reflected in the
calculation of the Purchase Price;
(f)
which is performed
in the ordinary course of business of the Company;
(g)
which gives rise to
a monetary gain, avoided loss, savings or other benefit (including
an effectively reduced Tax payment obligation) for or by Buyer or
any of the Companies (Vorteilsausgleich); or
(h)
explicitly set out
in Exhibit
5.5.
5.6
Any Affiliates of
a Seller, or any person related to a Seller or to any Affiliates of
a Seller (nahestehende
Personen) within the meaning of § 138 of the
Insolvency Code (such persons each a "Sellers' Related Party" and collectively "Sellers' Related Parties"), is
considered to be included in the term "Seller" for the purposes of
Clauses 5.4 and 5.5.
6
PAYMENT
OF PURCHASE PRICE; ESCROW
6.1
The Purchase Price
is due for payment by the Buyer as set out in Clause 6.2 and Clause 6.3 below on the Signing Date immediately after
the notarization of this Agreement.
6.2
The Buyer shall
pay the Purchase Price minus EUR 325,000.00 (in words: threehundred
twentyfive-thousand Euro) ("Escrow
Amount") in Euro and without deduction of any fees, costs or
retentions to the following joint account of the
Sellers:
Account
Holder:
xxxxxxxxxxxx
IBAN:
xxxx xxxx xxxx xxxx xxxx xx
Credit
Institution:
Sparkasse
Aachen
or any
other bank account notified by the Sellers to the Buyer no less
than five (5) Business Days prior to the respective payment date or
otherwise agreed by the Parties in writing ("Sellers' Account"). Such payment shall
have debt discharging effect (schuldbefreiende Wirkung) once it has
been irrevocably credited (unwiderruflich gutgeschrieben) to
Seller's Account.
6.3
The Buyer shall
pay the Escrow Amount in Euro and without deduction of any fees,
costs or retentions to the following account of the Escrow Agent
(as defined below):
Account
Holder:
xxxxxxxxxxx
IBAN:
xxxx xxxx xxxx xxxx xxxx xx
Credit
Institution:
Sparkasse
Aachen
(the
"Escrow Account"). Such
payment shall have debt discharging effect (schuldbefreiende Wirkung) once it has
been irrevocably credited (unwiderruflich gutgeschrieben) to the
Escrow Account.
Prior
to the Signing Date, the Sellers and the Buyer have entered into an
escrow agreement. A signed copy of the executed escrow agreement is
attached as Exhibit 6.3
for evidence purposes ("Escrow
Agreement").
6.4
The funds held in
the Escrow Account shall serve as security for any claim of the
Buyer against any of the Sellers under or in connection with this
Agreement. The Parties undertake to undertake all steps and give
such instructions as may be necessary to give effect to the
provisions of the Escrow Agreement without undue
delay.
The
performance of the Closing Actions ("Closing") will take place on the venue
where the notarization takes place on 28 April 2021, unless the
Parties agree on a different time and venue to perform the Closing
Actions. The day on which the Closing Actions are actually
performed and executed is referred to as the "Closing Date".
On the
Closing Date, the Parties will perform the following actions
("Closing Actions") in the following
order:
(a)
The Sellers shall
deliver to the Buyer duly executed managing director employment
agreements between the Company and each of Seller 1, Seller 2,
Seller 3 and Seller 4, substantially in the form and substance as
attached hereto as Exhibit
(a);
(b)
The Sellers shall
deliver to the Buyer a copy of the unilateral declaration by the
Company to Infors AG according to which the Company has declared a
modification of the contractual territory under the existing
distribution agreement between the Company and Infors AG dated
1 February 2016 (including amendments thereto), substantially
in the form and substance as attached hereto as Exhibit
(b);
(c)
The Buyer shall
pay the Purchase Price to the Sellers' Account in accordance with
Clause 6.2.
Immediately
following Closing, the Parties will execute a closing memorandum
substantially in the form and substance set out in Exhibit 7.3
("Closing Memorandum"). The Closing Memorandum
serves solely as evidence that Closing has occurred and that the
transfers of the Sold Shares set out in Clause 2.2 were completed. The execution of the
Closing Memorandum will not limit or prejudice the rights of the
Parties arising under or in connection with this Agreement or under
applicable law.
(a)
If the Buyer fails
to fulfil its obligation pursuant to Clause 7.2(c), i.e. to pay the Purchase Price in
accordance with Clause 6.2 to the
Sellers' Account, within five (5) Business Days after the scheduled
Closing Date, the Sellers shall first set a deadline of five (5)
Business Days for the Buyer by written statement (written statement
of one Seller being sufficient) specifying the breach of
obligation; after the fruitless expiration of the five (5) Business
Day deadline, the Sellers may rescind (zurücktreten) this Agreement by
joint written statement (within the meaning of § 126 of
the Civil Code (Schriftform)) to the Notary who shall
then inform the Buyer.
(b)
If the Sellers fail
to fulfil any of the Closing Actions pursuant to Clauses 7.2(a) and 7.2(b)
(unless to the extent such failures to fulfil the Closing Actions
are the result of a lack of required actions or cooperation of a
third party (except for the Company)) within five (5) Business Days
after the Closing Date, the Buyer may rescind (zurücktreten) this Agreement by
written notice within the meaning of § 126 of the Civil
Code (Schriftform) to the
Notary who shall then inform the Sellers.
8.2
There shall be no
right of rescission if the rescinding party itself has caused such
reason for rescission by culpable action or omission contrary to
good faith.
8.3
Legal Consequences
of Rescission
In the
event of a rescission (Rücktritt) of this Agreement under
Clause 8.1, this Agreement shall
lose its effectiveness retroactively (ex tunc) and the Parties shall no
longer have any claims and obligations under this Agreement.
Clause 1, this
Clause 8 and Clauses 17 to 22 and
25 to 28
shall however survive any rescission, without limit in time. A
rescission of this Agreement in accordance with
Clause 8.1 is without prejudice
to any claim a Party has resulting from a breach of this Agreement
by any other Party prior to the date of rescission.
9.1
As further
specified in Clauses 9.2 and
9.3 and 9.4, the Sellers hereby warrant to the Buyer
(in the form of independent warranties (selbständige Garantieversprechen)
pursuant to § 311 (1) of the Civil Code) subject to
any limitations contained in this Agreement that each of the
statements set out below in Clauses 9.2, 9.3 and
9.4 is true and accurate as at the
Signing Date and as at the Closing Date or at any such other date
specifically mentioned in such statement (such statements each a
"Sellers' Warranty" and
collectively the "Sellers'
Warranties").
Sellers
make the relevant Sellers' Warranties under exclusion of any joint
and several liability (unter
Ausschluss jeglicher gesamtschuldnerischer Haftung) as
partial debtors (als
Teilschuldner), unless where it is expressly specified that
a Seller makes a relevant Sellers' Warranty individually on its own
account and relating to its own circumstances as an individual
debtor (als
Einzelschuldner).
9.2
The following
statements in this Clause 9.2 are
made by all Sellers except for Seller 6
(cf. Clause 9.4) and unless
to the extent otherwise specified, in case of Clauses (a)(ii), (a)(iii),
(a)(iv), (a)(v), 9.2(a)(ix)
9.2(a)(xi), 9.2(b)(i), 9.2(b)(iv), 9.2(b)(v) and 9.2(b)(vii), however, only by the relevant
Seller individually on its own account and relating to its own
circumstances as an individual debtor (als Einzelschuldner):
(a)
Status of the
Sellers and the Companies
(i)
The Companies
have been duly incorporated and are validly existing under the laws
of Germany. All matters which are required to be registered in the
commercial register by the Company have been duly registered
therein, all matters which are required to be reported to such
commercial register have been duly reported and all documents to be
submitted to such commercial register have been duly submitted
thereto.
(ii)
Clause 9.2(a)(i)
applies to Seller 5, Seller 6 and Seller 7 mutatis mutandis.
(iii)
Each Seller has
the unrestricted right, power, authority and capacity to execute
and consummate this Agreement and the transactions contemplated
herein and, where applicable, all required approvals of any
corporate body of a Seller have been given.
(iv)
This Agreement
constitutes and all other documents executed by a Seller under or
in connection with this Agreement will, when executed, constitute
legal, valid and binding obligations of such Seller enforceable in
accordance with their terms.
(v)
Where applicable,
the execution and consummation of this Agreement and of the
transactions contemplated therein does not violate articles of
association, partnership agreement or other corporate documents, as
the case may be, or any other legal obligations of a Seller and is
not subject to challenge (Anfechtung) by any third party on any
legal basis, including any creditor protection laws.
(vi)
The complete and
accurate versions of the articles of association currently in force
for the Companies have been made available to the Buyer. These
articles of association are fully effective and enforceable. With
the exception of the agreements set out in Annex 9.2(a)(vi), there are no agreements
which oblige any of the Companies to subject itself to the
management of, or transfer their profit to, a third
party.
(vii)
Unless registered
in the commercial register of the Company there are no directors,
general attorneys-in-fact (Generalbevollmächtigte) and/or
authorised signatories (Prokuristen) of the Company, and there
are no persons holding a commercial power of attorney (Handlungsbevollmächtigte) or any
other similar power of attorney granted by the
Company.
(viii)
None of the
Companies is (i) over-indebted (überschuldet), (ii) unable to pay
its debts when they become due (zahlungsunfähig), (iii) insolvent
or (iv) subject to any insolvency proceedings or comparable
proceedings which has been announced in writing within the meaning
of § 126 of the Civil Code (Schriftform) to the respective
Company.
(ix)
Clause 9.2(a)(viii) applies to each Seller
mutatis
mutandis.
(x)
There is no
action, suit, investigation or other proceeding pending or
threatened against or affecting any of the Companies before any
court, arbitrator, governmental body, agency or official that in
any manner challenges or seeks to prevent, enjoin, alter or
materially delay the execution or consummation of this Agreement or
the transactions contemplated therein.
(xi)
Clause 9.2(a)(x)
applies to each Seller mutatis
mutandis.
(b)
Shares,
Subsidiary Interests and Sold CL Receivables
(i)
The Sold Shares
are all shares in the Company. The Sold Shares are freely
transferable, free and clear of any liens and encumbrances of third
parties and are not subject to any (a) trust arrangement
(Treuhandverhältnis)
except for the Sold Shares Seller 7, silent partnership
(stille Beteiligung) or
subparticipation (Unterbeteiligung); (b) pending transfer
or other disposition (Verfügung); (c) sale,
contribution, option or other contractual arrangement creating an
obligation to transfer or encumber; or (d) shareholders' resolution
providing for their redemption (Einziehung) or exclusion (Ausschluss), except for those rights
and agreements disclosed in Annex 9.2(b)(i).
(ii)
Clause 9.2(b)(i)
applies to the shares in the Subsidiary mutatis mutandis.
(iii)
None of the
Companies has any other participatory interests or branches or is
party to a joint venture, consortium or other internal company
(Innengesellschaft).
(iv)
The information
in relation to the Companies in Background Paragraph (A), (B) and
(D) of this Agreement is accurate. Unless set out otherwise in Annex
9.2(b)(i), the Sellers are the sole
owners of their respective Sold Shares and the Sellers are not
subject to any restrictions on transfer.
(v)
The shares in the
Company have been validly issued in compliance with applicable law.
The shares in the Company have been fully paid up, have not been
repaid in whole or in part, and are free from subsequent payment
obligations (Nachzahlungsverpflichtungen),
additional payment obligations (Nebenverpflichtungen) and other payment
obligations and restrictions. The Company has not resolved or made
any distribution since the Effective Date. All increases of the
share capital of the Company have been carried out in accordance
with all applicable legal and statutory provisions.
(vi)
Clause 9.2(b)(v)
applies to the shares in the Subsidiary mutatis mutandis.
(vii)
Seller 5,
Seller 6 and Seller 7 are the sole and unrestricted
creditors in relation to their respective Sold CL Receivables which
are free from any third-party rights.
9.3
The following
statements in this Clause 9.3 are
made by all Sellers except for Seller 6 (cf.
Clause 9.4) and unless to the
extent otherwise specified:
(a)
Annual financial
statements and equity
(i)
The audited
consolidated financial statements of the Company together with an
unqualified auditor's certificate for the financial year ending on
31 December 2020 ("Financial
Statements 2020") have been prepared in accordance with the
accounting standards, principles and practices generally accepted
in the jurisdiction of incorporation of the Company. They present,
as of the date of their preparation and based on the view of the
Company's management as of such date, in all material respects a
true and fair view of the state of affairs of the Company as
regards the level of the Company's assets and liabilities, profits
(or losses) and financial position (Vermögens-, Finanz- und
Ertragslage) as at the respective reference date. To
Sellers' Knowledge, there are no liabilities that should have been
taken into account when the respective annual financial statements
were prepared and which are not reflected as a liability or a
provision. For the avoidance of doubt, nothing in this
Clause 9.3(a)(i) shall be
construed as an objective accounts guarantee (harte bzw. objektive Bilanzgarantie)
within the meaning of the decision by the Higher Regional Court
(Oberlandesgericht)
Frankfurt am Main dated 7 May 2015 (26 U 35/12).
(ii)
Unless set forth
in Annex 9.3(a)(ii), there are no material
circumstances affecting asset values and liabilities as at 31
December 2020 which have become known after finalisation of the
annual financial statements but before (or on) the present
date.
(iii)
To Sellers'
Knowledge, as at 31 December 2020, with the exception of
liabilities which are not required to be reflected in the financial
statements of the relevant company (nicht bilanzierungspflichtige
Sachverhalte), the Companies have no liabilities other than
those which are expressly identified in the annual financial
statements and, insofar as they are not required to be expressly
reflected as a liability or a provision on the balance sheet, all
contingent liabilities (Haftungsverhältnisse) are recorded
as below-the-line items on the balance sheet or in the notes to the
financial statements (Anhang).
(iv)
To Sellers'
Knowledge, the books, accounting records and other records of the
Companies have been maintained in all material respects in
accordance with all applicable laws on a proper and consistent
basis. All
books, accounting records and other records belonging to the
Companies are in the possession of and subject to unrestricted
access by the respective company.
The
Companies have full, unrestricted and unencumbered ownership and
possession of all tangible and intangible assets used or intended
for use in their business or which are necessary to conduct their
respective businesses in the manner currently conducted,
except:
(i)
for those assets
which they have rented (gemietet), leased for use (gepachtet) or leased (geleast), in the usual course of
business,
(ii)
to the extent that
any such assets are subject to usual retention of title provisions
in favour of suppliers pending payment, or
(iii)
to the extent that
any such assets are subject to security rights created in the usual
course of business.
(c)
Agreements with
Shareholders or Related Parties
Other
than the agreements listed in Annex 9.3(c),
none of the Companies have entered into any agreement (the main
obligations of which have not been completely fulfilled) with any
Seller or any direct or indirect shareholders, relatives
(Angehörige) within
the meaning of Section 15 (1) of the German Tax Code (Abgabenordnung – "AO") of any Seller or such shareholders,
or with business entities (other than the respective other company)
in which any Seller or any of such shareholders has a direct or
indirect participation.
(i)
None of the
Companies (i) is the owner or co-owner of any real estate or (ii)
holds any rights equivalent to real property (grundstücksgleiche Rechte).
Annex 9.3(d)(ii) contains an accurate and
complete list of all real properties which are subject to a lease
or sub-lease agreement entered into by any of the Companies as
lessee or lessor, irrespective of whether concluded in writing
(within the meaning of § 126 of the Civil Code
(Schriftform)) or not,
(together the "Leased Real
Properties") setting out for each Leased Real Property the
location, size, use, and, in relation to the lease or sub-lease
agreements, the parties (name and address), date of agreement,
monthly rent, ancillary payments and any side agreements with
respect to the Leased Real Properties.
(iii)
In relation to the
Leased Real Properties:
(aa)
no lease agreement
contains restrictions which prevent the Leased Real Properties from
being used for their current use;
(bb)
except as set forth
in Annex 9.3(d)(ii) (i) there are no
current rent and ancillary payments payable under the relevant
lease agreements and (ii) no side agreements exist and no rent
reviews are pending or currently under negotiation;
(cc)
the Companies have
paid the rent, the ancillary payments and all other amounts payable
under or in connection with the lease agreements when
due;
(dd)
the Companies have
not violated any of their obligations under the relevant lease
agreements.
(e)
Intellectual
Property, Information Technology
(i)
The Companies are
the owner or licensee of all, in each of the following cases
material, patents, patent applications, utility models, other
rights in and resulting from inventions, know-how, trade secrets,
trademarks, business names, Internet domains, IT-systems (including
hardware, communication systems, network systems), design rights,
software, databases and other copyright works/neighboring rights
(including sui generis
database rights) (the "Intellectual
Property") required to conduct the Business substantially as
carried out up to the Signing Date. As regards their trade secrets,
the Companies have taken reasonable measures to protect them in
order to avoid any infringement and to ensure the Companies'
protected ownership of such trade secrets. None of the Companies is
limited in the use of its Intellectual Property by any contractual
obligations or restrictions (such as exclusive license agreements),
unless explicitly disclosed in the applicable disclosure
Annexes.
(ii)
The Company is
the owner of the Intellectual Property set forth in Annex 9.3(e)(ii)/1 and has an exclusive license for the
Intellectual Property set forth in Annex 9.3(e)(ii)/2 (commonly, the "Exclusive Intellectual Property"). All
fees as may be due for application, registration and maintenance of
any Exclusive Intellectual Property have been paid in full. Except
as set forth in Annex
9.3(e)(ii)/3, none of the Companies has granted
licenses to any third party or even waived their rights in respect
of the Exclusive Intellectual Property rights.
(iii)
The Companies
have all exploitation rights in respect of copyright works of their
employees as attributed to the Companies by the respective
applicable statutory law, i.e. have not deviated in favor of any
employees from the law. No current or former employees, owners,
directors, officers or consultants of the Companies have any
exploitation rights in any Intellectual Property, unless explicitly
disclosed in the disclosure Annexes to this Agreement. Any
exceptions from the statements in this Clause 9.3(e)(iii) are set out in Annex 9.3(e)(iii).
(iv)
There are no
unsatisfied claims, other than potential future regular
remuneration claims, of employee inventors to remuneration for
employee inventions (Arbeitnehmererfindungsvergütung)
which have their legal origins in circumstances arising before the
Closing Date and the Companies have fulfilled their statutory
duties that the Companies may have in respect of any employee
inventions, except as set out in Annex 9.3(e)(iv).
(v)
To Sellers'
Knowledge, neither the Intellectual Property nor the products,
services and business operations of the Companies are infringing
any property rights of third parties, except as set out in
Annex 9.3(e)(v). No written claims for
infringement of any property rights of third parties have been made
in the last twelve (12) months prior to the Signing Date and there
is no threat of such claims being made, except as set out in
Annex 9.3(e)(v).
(vi)
To Sellers'
Knowledge, in the last twelve (12) months prior to the Signing
Date, none of the Companies has suffered any material operational
and/or functional disruptions, i.e. disruptions of one or more
IT-systems of a consecutive duration of five (5) hours or more, or
loss of data which can be attributed to a functional disruption in
the IT hardware or software, i.e. in particular in the networks,
computer and communication systems, hardware, software, interfaces
and other technical systems for storing, processing or transmitting
data which are necessary and used in the operations of the
Companies (the "Information
Technology").
(vii)
The Companies have
implemented and use IT security systems with a security-level to be
reasonably expected for a company active in the
Business.
(viii)
The Information
Technology is in a proper, fully functional condition (subject to
normal wear and tear) to be reasonably expected for a company
active in the Business. To Sellers' Knowledge, no material service
or maintenance work is required and all material updates, patches
and service packs have been implemented and are generally
functionable.
(ix)
Selectrion GmbH
neither owns nor uses any Intellectual Property rights of any of
the Companies.
(i)
In the period of
three (3) years prior to the Signing Date, there have been no
investigations, proceedings, inquiries, orders or other measures by
the data protection Authorities at (or, to Sellers' Knowledge,
against) any of the Companies.
(ii)
There is no threat
in writing within the meaning of § 126 of the Civil Code
(Schriftform) of any fines
in respect of any past or current violations of data protection
law.
(i)
All items of the
Companies which contain secret or confidential know-how of the
Companies (documents, databases, etc.) are adequately protected
against unauthorized access by third parties and the employees of
the Companies are instructed to treat the relevant information
confidentially and just share such information on a need-to-know
basis.
(ii)
To Sellers'
Knowledge, there have been no cases since the formation of the
Company in which know-how of the Company was acquired, used, passed
on or disclosed by employees, customers, contractual partners or
(other) third parties without or against the will of the
Companies.
(iii)
Since the formation
of the Company, no written claims (within the meaning of
§ 126 of the Civil Code (Schriftform)) have been made against
any of the Companies for (i) the unauthorized acquisition, use,
transfer or disclosure of the know-how of employees, customers,
contractual partners or (other) third parties and/or (ii) a
violation of agreed confidentiality and protective measures. To the
Sellers' Knowledge, there are no facts on which claims within the
meaning of the preceding sentence could be based.
(h)
Material agreements
and obligations
(i)
Annex 9.3(h)(i) contains for the Company a
correct and complete list of all of the following agreements the
main obligations of which have not been completely fulfilled
(together the "Material
Agreements") setting out for each Material Agreement the
type of agreement, the parties (name), date, term and any ancillary
agreements, amendments, side letters and waivers (if
any):
(aa)
loan agreements
with, security granted in favour of, or obligations to,
banks;
(bb)
agreements
connected with the acquisition or sale of equity interests in legal
entities;
(cc)
agreements on
corporate joint ventures or joint development of
products;
(dd)
guarantees
(Garantien), bonds
(Bürgschaften),
comfort letters (Patronatserklärungen), indemnity
obligations (Freistellungsverpflichtungen) and
similar securities;
(ee)
research and
development agreements;
(ff)
agreements
regarding swaps, options, forward sales or purchases, futures and
other financial derivatives;
(gg)
agreements which
contain restrictions on competition or which otherwise restrict the
freedom of the Companies to conduct and expand their Business in a
material way;
(hh)
agreements
providing for usage rights and/or on maintenance and service
provision agreements relating to the Information Technology of the
Companies, other than off-the-shelf software licenses;
(ii)
agreements listed
in Annex (c);
(jj)
agreements to sell,
transfer, lease or dispose over any assets (other than the sale of
inventories) owned by the Companies outside their ordinary course
of business and with a market value exceeding, in each case,
EUR 5,000 (in words: five thousand Euro);
(kk)
all agreements and
obligations with a term of more than one (1) year or that cannot be
terminated within a period of twelve (12) months and which (in each
individual case) result in annual obligations of more than
EUR 5,000 (in words: five thousand Euro) (net) for any of the
Companies;
(ll)
all agreements with
customers and suppliers of the Company which (in each individual
case) have annual obligations of more than EUR 10,000 (in
words: ten thousand Euro);
(mm)
all agreements with
distribution, commercial agency or other agreements relating to
distribution which (in each individual case) have annual
obligations of more than EUR 5,000 (in words: five thousand
Euro);
(nn)
any commitment to
enter into any of the agreements referred to in this clause
9.3(h)(i).
(ii)
To Sellers'
Knowledge, each of the Material Agreements is valid and enforceable
against the relevant contractual partner(s), and all Material
Agreements have been duly performed, all due obligations contained
therein have been fulfilled and none of them has been terminated
nor has any such termination been declared or threatened within the
last twelve (12) month.
(iii)
No notice of
termination has been received or given by any of the Companies in
writing within the meaning of § 126 of the Civil Code
with respect to any Material Agreement. None
of the Companies has received formal written notice within the
meaning of § 126 of the Civil Code from any counterparty
to a Material Agreement that it intends to terminate
it.
(i)
Warranty claims
against the Companies
There
are no warranty claims (kaufrechtliche
Gewährleistungsansprüche) which have been brought
forward (in writing within the meaning of § 126 of the
Civil Code (Schriftform)) against the Companies within the
last 12 months and have not yet been settled, exceeding an
aggregate amount of EUR 5,000 (in words: five thousand
Euro).
(j)
Commercial agency
agreements
No
claims arising from the suspension or termination of distribution
(Vertragshändler),
commercial agency (Handelsvertreter) or other agreements
relating to distribution (irrespective of whether such have been
already terminated or not) have been brought forward against the
Companies in writing within the meaning of § 126 of the
Civil Code (Schriftform).
(k)
Licences and legal
provisions
(i)
Each of the
Companies is entitled to conduct its Business in the manner it is
currently conducted and has all material official permits, licences
and concessions issued by an Authority and required to conduct its
current Business as currently conducted (the "Permits"). To Sellers' Knowledge, the
Permits are in full force and effect (bestandskräftig) and have not been
challenged (angefochten) by
any third party. None of the Permits has been withdrawn, amended or
revoked in whole or in part in writing within the meaning of
§ 126 of the Civil Code (Schriftform) and, to Sellers'
Knowledge, there is no threat of any such withdrawal, amendment or
revocation. None of the Sellers is aware of any circumstances which
could lead to the restriction or revocation of any of the
Permits.
(ii)
The Companies are
and have been in full compliance with the Permits, including any
ancillary provisions (Nebenbestimmungen)
thereto.
(iii)
The Companies are
not a party to any public law agreements (öffentlich-rechtliche
Verträge).
(iv)
No violation by any
of the Companies is being or prior to the Signing Date has been
alleged in writing (within the meaning of § 126 of the
Civil Code (Schriftform))
by any Authority or any other third party with respect to any
environmental or other public law requirements.
(v)
Neither any Seller,
any Affiliate of a Seller, the Companies nor their directors and
employees have, directly or indirectly, in connection with the
Business
(aa)
used any funds of
the Companies for bribes, other unlawful purposes or political
contributions in violation of applicable laws;
(bb)
requested or
accepted any bribes or other unlawful benefits; or
(cc)
maintained any
funds or assets that have not been properly recorded in the books
and records of the Companies.
Except
as set out in Annex (l),
none of the Companies has been granted any public grants
(Zuschüsse), aids
(Beihilfen) or subsidies
(Subventionen).
(i)
Annex (m)(a) contains a correct and complete
anonymized list of the employees (including directors) of the
Companies as at 31 March 2021. Such list correctly states for
each employee the function/position and fixed monthly gross salary
and other remuneration entitlements (including any variable
remuneration entitlements and all additional benefits of monetary
value (such as company cars, insurance, etc.)) and the notice
period for a termination of the employment.
(ii)
Salaries and wages,
taxes and social security contributions are properly paid or shown
as liabilities in the financial statements of the
Companies.
(iii)
Annex 9.3(m)(iii) contains a list of all
material collective bargaining agreements, company-related
bargaining agreements and works agreements applicable to the
Companies which are more than a mere repetition of statutory
law.
(iv)
No freelancer,
consultant or other contracting party treated as self-employed
whose services any of the Companies uses or has used can
legitimately or rightfully claim the existence of an employment
relationship with one of the Companies (de facto employee). No
temporary employees (Leiharbeitnehmer) have worked or are
working for any of the Companies.
(v)
There is no social
compensation plan (Sozialplan) that has not yet been fully
implemented and no reconciliation of interests has been carried out
at any of the Companies.
(vi)
There are no
obligations or commitments on the part of the Company to continue
its business operations at the existing locations (location
guarantees), to maintain a certain number of employees (employment
guarantees) or to refrain from operational changes.
(vii)
None of the
Companies has made any direct or indirect commitment to pay a
retirement pension, disablement pension, pension for surviving
dependants or similar pension to present or former employees.
Proper accruals have been made for the liabilities of the Companies
arising from such pension obligations to the extent permitted by
tax law.
(viii)
Up to the date of
this Agreement, no employee of the Company has informed a Seller in
writing (within the meaning of § 126 of the Civil Code
(Schriftform)) or the
respective company that he or she intends to terminate his or her
employment.
(i)
Annex (n)(i)
contains a list of all insurance policies (including details of the
insured entity, insured risk and insurance company and annual
premium) held by any of the Companies. No due and payable premiums
under such insurance policies are outstanding.
(ii)
To the Sellers'
Knowledge, the Companies were in the past, and still are,
adequately insured against all risks which a prudent businessman
usually insures himself against and the insurance policies are in
force and have not been terminated.
Except
as disclosed in Annex
(o), none of the Companies is
involved in any pending or threatened (in writing within the
meaning of § 126 of the Civil Code (Schriftform)) disputes, court
proceedings, administrative proceedings or investigations,
including proceedings before an arbitration tribunal ("Legal Disputes").
(i)
In conducting
their business, the Companies do not infringe applicable material
laws such as, in particular, anti-money-laundering laws,
anti-corruption laws, competition or export control laws; provided,
however, that the Sellers' Warranty under this Clause 9.3(p)(i) shall not apply to any data
protection laws.
(ii)
Prior to the
Signing Date, none of the Companies has received a notification
(Bescheid) by any
governmental body (other than related to tax audits) alleging a
violation of applicable laws by the Companies.
(iii)
Neither the
Companies nor any of the Sellers nor any employees of the Companies
have granted, promised or raised the prospect of an unlawful
advantage or benefit in connection with business operations of the
Companies, or have been granted, promised, or given the prospect of
such an advantage or benefit.
Since
31 December 2020, the Business of the Companies has been carried on
in normal and ordinary course consistent with past practice of the
respective company. Since such date no event has occurred which
individually or jointly with other events has, to a material
extent, adversely affected the asset or profit situation of any of
the Companies on the basis of the Financial Statements
2020.
9.5
The scope and
limits of the warranties given in this Clause 9 are determined by Clauses 10 and 11 which
form an integral part of those warranties (Bestandteil der
Garantieerklärung). The Sellers do not give or assume
any warranties other than those set forth in this
Clause 9. The Parties agree that
none of the warranties or statements of the Sellers contained in
this Agreement constitutes a warranty or representation with
respect to the quality of the purchase object (Kaufgegenstand) within the meaning of
§§ 276 (1), 443 of the Civil Code (Garantie für die Beschaffenheit der
Sache) nor an agreement as to the condition of the goods
sold (Beschaffenheitsvereinbarung) within the
meaning of § 434 (1) of the Civil Code and none of
such warranties or statements is to be interpreted as such. The
Seller's Warranties shall exclusively be made for purposes of risk
allocation among the Parties. To the extent permitted by law, any
concept of imputed or attributed knowledge or intent (Wissens- oder Willenszurechnung) from
any individual to Sellers other than the persons listed in
Exhibit 1.2(a) shall be expressly
and comprehensively excluded for any claims, whether contractual,
statutory or otherwise. The Parties agree that if any disclosure of
events or documents made in the disclosure Annexes is below any
materiality threshold provided for such disclosure requirement, or
contains additional information, such disclosure shall not be used
to construe the extent of the required disclosure (including any
standard of materiality) pursuant to the relevant Sellers'
Warranty.
10
BREACH OF SELLERS'
WARRANTIES
Subject
to the provisions of this Clause 10, in the event that any of the statements
made by a respective Seller under the Sellers' Warranties is
incorrect (in each case a "Warranty
Breach"), the breaching Sellers are obligated - as partial
debtors (als
Teilschuldner), or where expressly provided, as individual
debtors, in each case under exclusion of any joint and several
liability (unter Ausschluss
jeglicher gesamtschuldnerischer Haftung) - as follows: they
have to put the Buyer, or at the election of the Buyer, the
Companies, into the same position that it/they would have been in
if the relevant Sellers' Warranty had been correct (Naturalrestitution) or, to the extent
such natural restitution (Naturalrestitution) is not possible or
not implemented within six (6) weeks following the notice under
Clause 10.2, Buyer may elect to
claim from the breaching Sellers to pay damages for non-performance
to the Buyer or the Companies in cash (Schadensersatz in Geld).
The
breaching Sellers are liable only for actual losses (direkte Schäden) incurred by the Buyer or the
respective Company as a result of the relevant Warranty Breach,
excluding any direct or indirect not reasonably foreseeable loss of
profits, special punitive or exemplary damages and any not
reasonably foreseeable consequential damages (Folgeschäden) and any potential or
actual reduction in value (Minderung) of the Companies or the
Buyer beyond the actual loss incurred; it being understood that any
losses shall be calculated on a Euro-for-Euro basis. The Sellers
shall not be liable for any loss of business opportunity, any
miscalculation of the Purchase Price by the Buyer, any wasted
expenditure (vergebliche
Aufwendungen) and/or for any incidental or internal
administrative and overhead costs of the Companies.
10.2
Notice of
Warranty Breach
If,
after Closing, the Buyer becomes aware of a Warranty Breach or any
circumstances which are reasonably likely to result in a Warranty
Breach, the Buyer will notify the Sellers within twenty
(20) Business Days of becoming aware of such Warranty Breach
or such circumstances. Such notification must state the nature of
the Warranty Breach and, to the extent reasonably possible at that
point in time, a good faith estimate of the amount of the losses
which are likely to be suffered by the Buyer or the Companies as a
result of such Warranty Breach.
Unless
otherwise agreed in this Agreement all legal remedies of Buyer for
a Warranty Breach or any other breach of a Seller's obligations
under this Agreement other than those specified in
Clause 10.1 are hereby excluded.
In particular, claims for or based on the right to reverse the
transactions contemplated under this Agreement (großer Schadensersatz), a
reduction of the purchase price (Minderung), rescission (Rücktritt) or other claims for
defects pursuant to § 437 of the Civil Code, culpa in
contrahendo (§ 311 of the Civil Code), positive breach of
contract (§ 280 of the Civil Code) (Schadensersatz wegen
Pflichtverletzung), frustration of contract (§ 313
of the Civil Code) (Störung
der Geschäftsgrundlage) or contest (Anfechtung) are excluded except in the
case of wilful misconduct or fraudulent misrepresentation. Any
claim of the Buyer for the transfer of the Shares (Erfüllungsanspruch) as provided in
Clause 2.2 is not intended to be
limited or excluded by the terms of Clauses 10 and 11.
11
LIMITATION OF SELLERS'
LIABILITY
1.1.1
With respect to
any claim in connection with a Warranty Breach ("Claim"), the Sellers are only liable, if
the amount of such Claim or the aggregate amount of Claims
resulting from the same or several related circumstances exceeds
EUR 7,500 (in words: seven thousand five hundred Euro)
("Qualified Claim");
and
1.1.2
the aggregate
amount of all Qualified Claims exceeds EUR 75,000 (in words:
seventy five thousand Euro), in which case the Sellers shall be
liable only for such amount of the Qualified Claims exceeding
EUR 75,000 (in words: seventy five thousand
Euro).
1.1.3
The liability of
the Sellers under this Agreement shall not be joint and several
(keine gesamtschuldnerische
Haftung). Any liability of a Seller shall be separate
(teilschuldnerische
Haftung), unless where it is expressly specified that a
Seller shall be individually liable (einzelschuldnerische Haftung). In case
several Sellers are partially liable (haften teilschuldnerisch) towards Buyer
under or in connection with this Agreement, each Seller shall only
be liable pro rata to the
portion of the Purchase Price received by it, subject to the
limitations set out in this Clause 11. Any liability cap (Clause 11.2) shall apply to each Seller pro rata to the portion of the Purchase
Price received by it.
1.1.4
Without prejudice
to the generality of Clause 1.1.3,
Seller 6 hereby expressly agrees that the portion of the
Escrow Amount allocated to Seller 6 is available for the Buyer
in case of any Warranty Breach even where Seller 6 has not
made the underlying Sellers' Warranty (cf. Clause 9.4).
(a)
Specific Liability
Cap
The
total liability of a Seller under or in connection with this
Agreement shall be capped as follows:
(ii)
liability in
relation to Sellers' Warranties which are not Fundamental
Warranties:
(aa)
in the case of
Seller 1, Seller 2, Seller 3 and Seller 4: 15%
of the portion of the Purchase Price received by the relevant
Seller; provided, however, that with regard to a breach of the
Sellers' Warranties set out in Clause 9.3(e), the liability cap shall be increased by
an additional 10% of the portion of the Purchase Price received by
the relevant Seller; and
(bb)
in the case of
Seller 5, Seller 6, Seller 7 and Seller 8: the
portion of the Escrow Amount allocated to the relevant
Seller;
(iii)
liability with
respect to Taxes (Clause 12): 25%
of the portion of the Purchase Price received by the relevant
Seller.
The
overall liability of each respective Seller towards the Buyer under
or in connection with this Agreement shall in any case be limited
to the Purchase Price amount actually received by such
Seller.
(a)
All claims
against the Sellers under or in connection with this Agreement will
become time-barred (verjähren) as follows
("Limitation
Period"):
(i)
36 (thirty-six)
months after the Closing Date in respect of Claims under or in
connection with the Fundamental Warranties;
(ii)
all claims of Buyer
arising as a result of wilful or intentional breaches of Sellers'
obligations under this Agreement shall become time-barred in
accordance with the statutory rules in §§ 195, 199
of the Civil Code;
(iii)
all claims under
Clause 5 which shall be
time-barred in accordance with Clause 5; and
(iv)
all claims under
Clause 12 which shall be
time-barred in accordance with the relevant provisions set out in
Exhibit 12; and
(v)
12 (twelve) months
after the Closing Date in respect of all other claims.
(b)
The principle of
suspension of the statute of limitations (Hemmung der Verjährung) in
accordance with § 203 of the Civil Code
in the event negotiations take place shall apply to all Claims, if
the relevant Parties agree in writing that the Limitation Period
shall be tolled (gehemmt).
11.4
Limitations on
Sellers' Liability
Any
liability of the Sellers in respect of any claim against the
Sellers under or in connection with this Agreement is excluded to
the extent that:
(a)
the corresponding
claim is based on a change in the legal situation (including, for
the avoidance of doubt, any change of law, statute, ordinance,
rule, regulation, common law rule, case law or administrative
practice of any government, governmental department, agency or
regulatory body) after the Signing Date;
(b)
any measure or
action has been taken or omitted to be taken with respect to the
subject matter of the claim prior to the Closing Date at the
express written request, or with the express unqualified
(vorbehaltlos) written
approval or acquiescence, of the Buyer;
(c)
the Buyer or any of
its Affiliates (after the Closing Date, also including the Company)
has caused or contributed to (verursacht oder mitverursacht) such
claim and/or has failed to comply with its duty to mitigate damages
pursuant to § 254 (2) of the Civil
Code;
(d)
any amounts are
recoverable or could have been recoverable from any third party
(including any insurance company);
(e)
the facts forming
the basis of the Claim:
(i)
were known or could
have been known to the Buyer or any of its Affiliates or
Representatives on the Signing Date taking into account that Buyer,
prior to entering into this Agreement, has conducted a detailed and
in-depth due diligence including a comprehensive Q&A process by
which the Buyer had the opportunity to thoroughly review the
condition of the Companies and the Business including the
commercial, technical, organizational, financial, tax,
environmental and legal aspects of the Companies and to discuss the
same with the Companies' management;
(ii)
have been
disclosed to the Buyer or its Representatives in a Fair Manner.
"Fair" means a disclosure,
in particular through documents and information contained in the
virtual data room (the "Data
Room") that is objectively suitable in form, scope and
manner of disclosure to provide the Buyer with a sufficiently clear
and complete picture of the relevant facts of life in a reasonable
manner so that, based on customary market due diligence standards,
a buyer is objectively able to recognize or suspect the inaccuracy
of the corresponding Sellers' Warranty. For evidentiary purposes,
the contents of the Data Room as well as the minutes of the
Management Interview were stored by the Sellers on a USB stick (the
"Data Room Stick") and
copies of the Data Room Stick were exchanged between the Sellers
and the Buyer on the Closing Date. The Parties have furthermore
handed over a copy of the Data Room Stick to the Notary for
evidence purposes on the Closing Date with the instruction to keep
it for a period of five (5) years, unless the Parties jointly issue
a deviating instruction at least in text form (§ 126b of
the Civil Code). After expiry of the period, the notary may destroy
the data room stick;
(iii)
are referred to in
this Agreement (for the avoidance of doubt including
Clauses 9.2(a) and 9.2(b) and any Exhibits and Annexes to this
Agreement);
(iv)
have been taken
into account for the purposes of calculation of the Purchase Price
or the relevant circumstances or facts have already resulted in a
compensation under another claim of Buyer (no
double-counting/double-compensation);
This
limitation does not apply to Claims in respect of the Fundamental
Warranties;
(f)
The Financial
Statements 2020 provide for an accrual (Rückstellung), a liability
(Verbindlichkeit), an
exceptional depreciation (außerplanmäßige
Abschreibung) or a depreciation to reflect lower market
values (Abschreibung auf den
niedrigeren beizulegenden Wert);
(g)
The matter giving
rise to a Warranty Breach or Buyer claim leads to any benefits by
refund, credit, set-off, reduction of Taxes or any other kind of
Tax savings for the Companies, Buyer and/or any Affiliate of Buyer;
it being understood that in the event that any of the Companies,
Buyer and/or any Affiliate of Buyer is entitled to any such Tax
benefit with respect to any amounts for which Buyer makes a claim,
such party shall use reasonable best efforts to obtain any such Tax
benefit;
(h)
The procedures set
forth in Clause 10.2 were not observed
by the Buyer or the Company and the damage has been caused or
increased by this non-observance.
Unless
expressly set out otherwise in this Agreement, any matters relating
to Taxes, any liability, warranty, indemnification or other claim
in connection with or arising from Taxes are covered exclusively by
the provisions set out in Exhibit 12.
13.1
The Buyer hereby
warrants to the Sellers (in the form of independent warranties
(selbständige
Garantieversprechen) pursuant to § 311 (1) of
the Civil Code) that each of the statements set out below in
Clause 13.2 are true and accurate
as at the Signing Date and at the Closing Date, or at any other
date specifically mentioned in such statement (such statements each
a "Buyer's Warranty" and
collectively the "Buyers'
Warranties").
(a)
Buyer is a company
duly incorporated and validly existing under the laws of the State
of Delaware, under registration number 5847011. This Agreement
constitutes and all other documents executed by Buyer under or in
connection with this Agreement will, when executed, constitute,
legal, valid and binding obligations of Buyer enforceable in
accordance with their terms.
(b)
Buyer has the
unrestricted right, power, authority and capacity to execute and
consummate this Agreement and the transactions contemplated herein
and that, where applicable, all required approvals of any corporate
body of Buyer have been given and no further approval. With regard
to the execution and performance of this Agreement, Buyer does not
(i) require any approval or consent by any governmental authority,
public agency or other third party, (ii) violate any applicable
law, rule, regulation or decision by any court or governmental
authority or public agency binding on Buyer or (iii) violate the
articles of association or by-laws of Buyer.
(c)
There is no action,
suit, investigation or other proceeding pending or threatened
against or affecting Buyer or its sole shareholder before any
court, arbitrator, governmental body, agency or official that in
any manner challenges or seeks to prevent, enjoin, alter or
materially delay the execution or consummation of this Agreement or
the transactions contemplated therein, and, to Buyer's Knowledge,
there are no circumstances that give rise to any of the
foregoing.
(d)
Neither Buyer nor
any of its shareholders is (i) over-indebted (überschuldet), (ii) unable to pay
its debts when they become due (zahlungsunfähig), (iii) insolvent
or (iv) subject to any insolvency proceedings or comparable
proceedings. To Buyer's Knowledge, there are no circumstances which
could lead to the insolvency of Buyer or any of its
shareholders.
(e)
Buyer has had
access to detailed information about the Companies and the
Business, completed an in-depth due diligence review prior to the
Signing Date including a comprehensive Q&A process and made its
own evaluation of the adequacy and accuracy of such projections,
forecasts, estimates, statements of intents and statements of
opinion (including the reasonableness of the assumptions underlying
the same) of the Business operations of the Companies.
(f)
Buyer explicitly
acknowledges that Sellers – neither directly nor through any
person acting on its behalf – have made no and make no
representations, warranties or guarantees and have assumed no and
assume no disclosure, information or similar obligations in
connection with this Agreement and the transactions contemplated
hereby, except as expressly set forth in this
Agreement.
(g)
Buyer's analysis of
the requirements to file for antitrust or other clearance by
governmental institutions or authorities is true and correct. There
is no requirement to file for any approval or clearance by a
governmental institution or authority.
(h)
Buyer has
sufficient unconditional and immediately available funds to meet
its payment obligations pursuant to this Agreement when due and to
consummate the transactions contemplated under this
Agreement.
13.3
Where any
statement is qualified as being limited by the "Buyer's Knowledge", the statement is
deemed to be given to the actual knowledge (positive Kenntnis) which the persons
identified in Exhibit 13.3
had as at the Signing Date or should have had if they were not
acting grossly negligent (grobe
Fahrlässigkeit).
13.4
If and to the
extent any of the Buyer's Guarantees, covenants or other agreements
pursuant to this Agreement is breached or if Buyer is otherwise
liable to Sellers pursuant to or in connection with this Agreement,
Sellers' respective claims and remedies, and Buyer's liability
vis-à-vis Sellers,
shall, unless otherwise agreed in this Agreement, be determined in
accordance with statutory law.
14.1
Buyer undertakes to
maintain the current facilities of the Company located in
Baesweiler, Germany for a minimum period of five (5) years
following Closing, provided however, that a reasonable relocation
within the Aachen/Cologne/Düsseldorf region shall be permitted
during this period.
14.2
Buyer shall procure
that, on the second anniversary of the Closing Date, each current
employee of the Company who has continuously remained employed by
the Company or an Affiliate of Buyer and/or the Company throughout
such two-year-period will receive a bonus payment in the amount of
10% of their current annual salary.
14.3
Buyer shall procure
that the shareholder of Seller 7, Dr. Jürgen Schumacher,
will be nominated to the board of directors of Buyer's parent
company Scientific Industries, Inc. upon request.
15
NON-COMPETE,
NON-SOLICITATION
15.1
Each of Seller 1,
Seller 2, Seller 3 and Seller 4 undertakes for a period of two
(2) years from the Closing Date ("Applicable Period") not to carry on any
business anywhere where the Companies operate which competes with
the Business. This undertaking does not apply to any shareholdings
or participations which are for investment purposes only and in
which the respective Seller or the Sellers do not have a material
influence on the conduct of business.
15.2
Each of
Seller 1, Seller 2, Seller 3 and Seller 4 agrees that for
the Applicable Period it shall not, and shall cause any Affiliate
or its respective Seller's Related Parties not to:
(a)
solicit or induce,
directly or indirectly, any current employee of the
Companies:
(i)
to interfere with
the Business, or
(ii)
to discontinue his
or her employment with the Companies;
or
(b)
hire, retain or
attempt to hire or retain any person currently employed or employed
by the Companies within the twelve (12) months period prior to the
Closing Date.
15.3
General
solicitations
For the
avoidance of doubt, no Seller nor any of their Affiliates nor any
Seller's Related Party shall be prohibited from
employing any person who (i) contacted them on his or her own
initiative (without any direct or indirect initiative by a Seller,
its Affiliates or its Seller's Related Parties) or (ii) approaches
the Sellers, their Affiliates or any Seller's Related Parties on an
unsolicited basis in response to a bona fide general public job
advertisement or (iii) has been subject to a non-targeted search
placed by or on behalf of the Sellers, any of their Affiliates or
Seller's Related Parties (iv) is no longer an employee of any
Company at the time of such contact.
15.4
For the avoidance
of doubt, the above restrictions on non-competition and on
non-solicitation have been taken into account in the calculation of
the Purchase Price and are therefore included in the Purchase
Price.
16.1
After the Closing
Date, the Parties shall cooperate in good faith to fully integrate
the Companies' Business into the Buyer's own business.
16.2
Each Party will
cooperate, at its own cost and expense, with the other on the
reasonable request of the other to give full effect to this
Agreement, in particular to execute such documents and take such
further actions as may be reasonably requested by the other Party
to carry out the provisions of this Agreement and the transactions
contemplated in this Agreement, and unless expressly provided
otherwise in this Agreement to obtain in a timely manner all
necessary waivers, consents and approvals to effect all necessary
registrations and filings.
16.3
For a period of ten
(10) years following the Closing but at least until the final
and binding decision of the next Tax Authorities' audit of the
Sellers and the Affiliates of the Sellers, the Buyer will, on
reasonable notice, afford that the Sellers and the Sellers' agents
and advisors are given access during normal business hours to the
books and records of the Company insofar as such books and records
relate to the period ending at Closing, and are permitted to take
(physical and/or electronic) copies of them, for the purpose of the
Sellers' compliance with the requirements of any
Authority.
17
PAYMENTS; NO SET-OFF OR
RETENTION; DEFAULT INTEREST
17.1
All payments under
this Agreement are to be made in EUR and in full when due
(fällig) without any
set-off (Aufrechnung) in
immediately available funds and free from any deduction , and all
obligations under this Agreement shall be made under exclusion of
the right to retain (Zurückbehaltungsrecht), except:
(a)
as explicitly
permitted otherwise under this Agreement (including its Exhibits
and Annexes);
(b)
as may be
required by any applicable requirement of law or of any person who
has regulatory authority which has the force of law ("Regulatory Requirements") (in which event such
deduction or withholding must not exceed the minimum amount
required by such Regulatory Requirements and the payer will
simultaneously pay to the payee whatever additional amount is
required so that the net amount received is equal to what would
have been received if no such deduction or withholding had been
required); or
(c)
to the extent any
such right to set-off, counterclaim, deduction or retention has
been acknowledged in writing within the meaning of § 126
of the Civil Code (Schriftform) by the other Party or has
been finally determined by a competent court as due and
payable.
If a
Party fails to pay any sum payable under this Agreement on the due
date for payment, it is in default (Verzug) of such payment obligation from
the due date, without any further notice of the other Party being
required. Unless otherwise agreed, interest accrues on the unpaid
amount at the rate calculated in accordance with
§ 288 (2) of the Civil Code for the period from and
including the due date up to, but not including, the date payment
is received by the other Party (after as well as before a court
decision) (the "Default
Interest") and default Interest will accrue from day to day
on the basis of the actual number of days elapsed and a 360-day
(three hundred and sixty day) year, and is payable on the final day
of each calendar month in arrears, but in any event on the date of
payment of the sum which the respective Party is in default
with.
18.1
Unless expressly
provided otherwise in this Agreement each Party pays its own costs
and expenses in relation to the negotiation, preparation, execution
and performance of this Agreement.
18.2
Buyer shall bear
all fees, duties and levies resulting from the notarization of this
Agreement (including any reference deeds or amendment agreements)
and the application to or filing with any Authority.
18.3
Buyer shall bear
any and all direct, indirect, sales, transfer, ad valorem and
ancillary taxes, duties, withholdings, imposts, levies and charges
(including real estate transfer taxes, VAT, stamp duties and other
public levies or other similar charges), in each case payable by
reason of the transactions contemplated under this Agreement
(except for German income Taxes on Sellers' capital gain), and file
all returns and notifications required under statutory law with
respect to the public levies or similar charges as set forth under
this Clause 18.3, in each case
with a copy to Seller.
19
CONFIDENTIALITY,
ANNOUNCEMENTS
19.1
Each Party keeps
confidential and procures that any of its Affiliates keeps
confidential:
(a)
the negotiations
relating to and concerning this Agreement;
(b)
the subject matter
and terms and conditions of this Agreement;
(c)
in the case of
the Sellers, all confidential information of the Buyer and its
Affiliates made available to the Sellers by the Buyer in the course
of the negotiations preceding the Signing Date as well as all
confidential information and business secrets of the Companies,
provided that nothing in this Clause 19.1(c) shall prohibit Seller 1,
Seller 2, Seller 3 and/or Seller 4 from using any
information or secrets within their function as managing director
(or in another capacity) at the Companies and/or in any capacity
within the Buyer group, in each case in accordance with the
respective contractual agreements; and
(d)
in the case of
the Buyer, all confidential information of the Sellers and their
Affiliates and the Companies made available to the Buyer by the
Sellers, their Affiliates or Representatives in the course of the
negotiations preceding the Signing Date, provided that nothing in
this Clause (d) requires the
Buyer to keep any information relating to the Companies
confidential once Closing has occurred.
19.2
Either Party may
disclose any information that it is required to keep confidential
under this Clause 19:
(a)
to the extent that
the disclosing Party procures that any person to whom the
information is disclosed pursuant to (i) to (iv) keeps
such information confidential
(i)
to such
employees, professional advisors, consultants, or officers of the
respective Party and its Affiliates (including its shareholders) as
is reasonably necessary to advise on this Agreement, or to
facilitate the transactions provided for in this
Agreement;
(ii)
to such credit
institutions and financing sources dealing with the financing of
the transaction contemplated under this Agreement or a subsequent
refinancing;
(iii)
in the course of
other M&A transactions of the Parties or their Affiliates
relating to the shares and/or assets of any of the Companies;
or
(iv)
to its sources
of financing.
(b)
with the other
Party's prior written consent; or
(c)
to the extent that
the disclosure is required:
(i)
by Regulatory
Requirements (including, for the avoidance of doubt the SEC, IFRS,
the German Federal Ministry for Economic Affairs and Energy
(Bundeministerium für
Wirtschaft und Energie) and the German Supreme Audit
Institution (Bundesrechnungshof));
(iii)
to make any filing
with, or obtain any authorisation from, an Authority in connection
with the transactions contemplated by this Agreement;
or
(iv)
to protect the
disclosing Party's interest in any legal proceedings in connection
with this Agreement and the transactions contemplated
therein;
but
will use reasonable endeavours to consult the other Party and to
take into account any reasonable requests it may have received in
relation to the disclosure before making it.
19.3
As far as the
transactions contemplated by this Agreement are concerned, each
Party must supply the other with any information about itself, any
Affiliate of such Party, its business or this Agreement as the
other may reasonably require for the purposes of satisfying any
Regulatory Requirements or requirements of any securities exchange
to which the requiring Party is subject.
19.4
No Party is
entitled to make any press release or other public announcement in
connection with this Agreement except:
(a)
an announcement in
a form agreed by the Buyer and the Sellers; and
(b)
to the extent any
announcement is required by any applicable Regulatory Requirements
(provided that, unless such consultation is prohibited by
Regulatory Requirements, it is made only after consultation with
the Buyer or the Sellers, as the case may be).
19.5
The provisions
of the confidentiality agreement entered into between the Parties
dated 12 May 2019 ("Confidentiality Agreement") are hereby
terminated subject to the occurrence of the Closing, provided that
such termination is without prejudice to any claims of either Party
which have arisen under the Confidentiality Agreement prior to the
date hereof.
19.6
The provisions of
this Clause 19 will continue to
have effect for the period of two (2) years from the Closing
Date.
20
NOTICES AND
COMMUNICATIONS
20.1
Any notice to be
given under this Agreement must be in writing and either be
delivered by hand or by e-mail. Delivery by courier is regarded as
delivery by hand.
20.2
In the context of
this Agreement, Sellers appoint Seller 5 as its representative
to act in relation to the Buyer, any Authority or any other third
party, including the receipt and making of notifications or other
declarations and the execution of Sellers' rights under this
Agreement.
20.3
Notices must be
sent to the address of the relevant Party referred to in this
Agreement or the e-mail address set out below or to such other
address, or e-mail address as may previously have been notified to
the sending Party in accordance with this Clause 20. Each communication must be marked for the
attention of such person as is set out below, or has previously
been notified to the sending Party in accordance with this
Clause 20 (the "Relevant Person").
If to
the Sellers or one of the Sellers, represented by Seller 5,
to:
|
Address:
|
Markt
45-47, 52062 Aachen, Deutschland
|
|
E-mail:
|
schleicher@s-ubg.de
|
|
Attention:
|
Dr.
Ansgar Schleicher
|
|
|
|
|
with a
copy to
|
|
|
Address:
|
Baker
& McKenzie Partnerschaft von Rechtsanwälten und
Steuerberatern mbB, Neuer Zollhof 2, 40221
Düsseldorf
|
|
E-mail:
|
heiko.gotsche@bakermckenzie.com
|
|
Attention:
|
Dr.
Heiko Gotsche
|
|
|
|
If to
the Buyer, to:
|
Address:
|
80
Orville Drive, #102, Bohemia, NY 11716, U.S.A.
|
|
E-mail:
|
hsantos@scientificindustries.com
|
|
Attention:
|
Helena
Santos
|
with a
copy to:
|
Address:
|
CMS
Hasche Sigle Partnerschaft von Rechtsanwälten und
Steuerberatern mbB, Kranhaus 1 / Im Zollhafen 18, 50678 Köln,
Germany
|
|
E-mail:
|
klaus.jaeger@cms-hs.com
|
|
Attention:
|
Klaus
Jäger
|
20.4
A communication
is deemed to have been received:
(a)
if delivered by
hand or courier, at the time of delivery; and
(b)
if delivered by
e-mail, at the time of completion of the transmission to the
Relevant Person of the respective Party by the sender.
If
under this Clause 20 a notice
would be deemed to have been received outside normal business hours
(being 8:00 hours to 20:00 hours on a Business Day) in
the time zone of the territory of the recipient then the notice
will be deemed to have been received at the next opening of
business hours in such place of receipt.
20.5
In proving
receipt of notice, it is sufficient to show that:
(a)
delivery by courier
was made; or
(b)
the e-mail was
dispatched to the Relevant Person of the respective receiving
Party, unless the receiving party proves that the e-mail has not
been received by such Relevant Person.
20.6
Notwithstanding the
provisions of Clauses 20.4 and
20.5, the Parties may prove receipt of
a notice under this Agreement in any other way admissible.
Irrespective of the foregoing, each Party is obligated to confirm
and to procure that any of its representatives including the
Relevant Person confirm the notifying Party receipt of such notice
promptly.
20.7
A Party may notify
the other Parties of a change to its name, Relevant Person, address
or e-mail address for the purposes of this Clause 20 and notification is effective
on:
(a)
the date specified
in the notification as the date on which the change is to take
place; or
(b)
if no date is
specified or the date specified is less than five (5) Business Days
after the date on which notice is deemed to have been received, the
date falling five (5) Business Days after notice of any such change
is deemed to have been received.
20.8
For the avoidance
of doubt, the Parties agree that the provisions of this
Clause 20 do not apply to the
service of any writ, summons, order, judgment or other document
relating to or in connection with any proceedings.
This
Agreement and all notices or formal communications under or in
connection with this Agreement must be in English unless otherwise
required by law. Documents attached and referred to in notices or
formal communications under or in connection with this Agreement
may also be in English or German or accompanied by a convenience
translation to English or German.
Any
amendment or variation of this Agreement must be (i) in writing
within the meaning of § 126 of the Civil Code
(Schriftform) or (ii)
notarised if so required under German law. This applies equally to
any amendment or variation of the terms set out in the preceding
sentence. In case of an amendment or variation pursuant to (i) of
the first sentence of this Clause 22,
the Parties are obligated to provide the original signed amendment
or variation to the respective other Party.
23
SELLERS' DECLARATION OF
APPROVAL
23.1
Pursuant to Article
7(3) of the articles of association of the Company, resolutions of
the shareholders' meeting of the Company concerning certain legal
transactions and measures may only be passed with the prior consent
of a simple majority of Seller 5, Seller 6, Seller 7 and Seller
8.
23.2
The Seller 5,
Seller 6, Seller 7 and Seller 8, each individually, hereby grant
their approval to the passing of all shareholders' resolutions of
the Company after Closing by the Buyer as the (future) new
shareholder of the Company. This includes in particular (but not
limited to) shareholder resolutions with regard to the amendment of
the articles of association of the Company as well as the amendment
of the rules of procedure for the management board including the
adjustment of the catalogue of legal transactions requiring prior
approval of the shareholders' meeting or advisory board and the
adoption of new rules of procedure for the advisory board of the
Company. The provisions set out in Clause 24 shall remain unaffected by this
Clause 23.
24
POWER OF ATTORNEY IN FAVOUR OF
BUYER AND SELLERS
24.1
The Parties are
aware that the Buyer is not entitled to exercise the shareholder
rights as against the Company until the shareholders' list in which
the Buyer is named as the new shareholder is entered in the
commercial register of the Company. The Sellers undertake not to
act as shareholder of the Company in the period between the Closing
Date and the inclusion of the shareholders' list submitted to the
commercial register by the notary (§ 16 (1) 1
of the Limited Liability Companies Act).
24.2
With effect as
of the Closing Date, the Sellers grant to the Buyer an unrestricted
and irrevocable power of attorney, releasing the latter from the
restrictions set out in § 181 of the Civil Code (except
in the case of Seller 6 which grants such power of attorney,
however only releasing the Buyer from such restrictions set out in
§ 181 Alt. 2 of the Civil Code) and in conjunction
with the right to grant power of attorney to third parties, to
represent each Seller when exercising all and any rights and powers
to which the respective Seller is entitled as shareholder of the
Company, in particular to adopt shareholders' resolutions including
any mutually agreed amendment to the articles of association of the
Company. The power of attorney lapses on entry of the updated
shareholders' list in which the Buyer is named as shareholder of
the Company in the commercial register in accordance with
§ 16 (1) of the Limited Liability Companies
Act.
24.3
The Buyer
undertakes not to pass any shareholders' resolutions based on the
power of attorney given in Clause 24.2 above which may impose any liability on
any of the Sellers, respectively, and will indemnify and keep
indemnified (freistellen)
the Sellers from any third-party claim.
25.1
Nothing in this
Agreement is to be read or construed as excluding any liability or
remedy in respect of fraud.
25.2
Should one or more
provisions of this Agreement be or become invalid or unenforceable
in whole or in parts, or if there is a contractual gap, this does
not affect the validity and enforceability of the remaining
provisions of this Agreement. In place of the invalid or
unenforceable provision, or to fill such contractual gap, such
valid and enforceable provision applies which reflects as closely
as possible the commercial intention of the Parties as regards the
invalid, unenforceable or missing provision. The legal principle
set out in § 139 of the Civil Code, including the
reversal of the burden of proof, does not apply.
26.1
In this
Clause 26, references to this
Agreement include all other written agreements and arrangements
(within the meaning of § 126 of the Civil Code
(Schriftform)) between the
Parties which are expressed to be supplemental to this Agreement or
which this Agreement expressly preserves or requires to be
executed.
26.2
This Agreement
constitutes the entire and only agreement and understanding between
the Parties in relation to its subject matter. All previous drafts,
agreements, understandings, undertakings, representations,
warranties, promises and arrangements of any nature whatsoever
between the Parties with any bearing on the subject matter of this
Agreement are superseded and extinguished to the extent that they
have such a bearing and each of the Parties acknowledges to the
other, after due and careful consideration, that it is not entering
into this Agreement in consequence of or in reliance on anything it
is the purpose of this Clause 26.2 to exclude.
26.3
All Exhibits and
Annexes form an integral part of this Agreement.
Any
obligation of a Party to indemnify and keep indemnified
(freistellen) another Party
under this Agreement is an obligation to do so on first demand
(auf erstes
Anfordern).
28
GOVERNING LAW AND
JURISDICTION
28.1
This Agreement and
its terms are governed by and construed in accordance with German
law, excluding the United Nations Convention for the International
Sale of Goods (CISG) and the conflict of law rules.
28.2
Any and all
disputes or differences arising out of or in connection with this
Agreement, or its breach, termination or invalidity shall be
finally settled by the state courts (staatliche Gerichte) of Germany. The
courts of Düsseldorf, Germany, shall be the competent courts
to the extent legally permitted under applicable law. The Parties
shall bring any proceeding under this Clause 28.2 to the judgement of the
Chamber for Commercial Matters (Kammer für Handelssachen) if
permitted under applicable law.
This
deed was read by the notary to the persons appearing, accepted by
the persons appearing and signed by them and the notary as
follows:
|
Geschäftsführeranstellungsvertrag
|
|
Director‘s Service Contract
|
|
zwischen:
|
|
between:
|
|
(1) Herrn Daniel Grünes,
Scheffelstraße 13, 50935 Köln,
Deutschland,
|
|
(1) Mr Daniel Grünes,
Scheffelstraße 13, 50935 Cologne,
Germany,
|
|
–
nachfolgend "Geschäftsführer"
–
|
|
–
hereinafter "Managing
Director"
–
|
|
(2) aquila biolabs GmbH,
Arnold-Sommerfeld-Ring 2, 52499 Baesweiler, Deutschland,
vertreten durch die Gesellschafterversammlung,
|
|
(2) aquila biolabs GmbH,
Arnold-Sommerfeld-Ring 2, 52499 Baesweiler, Germany,
represented by the shareholders'
|
|
–
nachfolgend "Gesellschaft"
–
|
|
–
hereinafter "Company"
–
|
|
PRÄAMBEL
|
|
PREAMBLE
|
|
Der
Geschäftsführer ist Gesellschafter und
Geschäftsführer der Gesellschaft. Der
Geschäftsführer beabsichtigt, seine Geschäftsanteile
an die Scientific Bioprocessing Holdings, Inc. zu
veräußern ("Transaktion"). Der
Geschäftsführer soll auch nach Veräußerung der
Gesellschaftsanteile Geschäftsführer der Gesellschaft
bleiben. Der bisherige Geschäftsführer-Anstellungsvertrag
soll jedoch durch diesen
Geschäftsführer-Anstellungsvertrag ersetzt
werden.
Dieser
Geschäftsführer-Anstellungsvertrag steht unter der
aufschiebenden Bedingung des erfolgreichen Abschlusses der
Transaktion ("Closing").
Vor
diesem Hintergrund vereinbaren die Parteien was folgt:
|
|
The
Managing Director is a shareholder and director of the Company. The
Managing Director intends to sell his shares in the Company to
Scientific Bioprocessing Holdings, Inc (the "Transaction"). The Managing Director
shall remain Managing Director of the Company after the transaction
of the shares. However, the previous managing director employment
contract shall be replaced by this Director's Service
Contract.
Closing
of the Transaction is condition precedent for this Director's
Service Contract coming into force.
Against
this background, the parties agree as follows:
|
|
??1 Bestellung
und Vertretung
|
|
??1 Appointment
and representation
|
|
(1) Herr
Daniel Grünes wurde mit Beschluss des für
Geschäftsführerangelegenheiten zuständigen Organs
vom 11.08.2014 ab dem 11.08.2014 und durch Beschluss vom 22.10.2019
ab dem 01.11.2019 zum Geschäftsführer der Gesellschaft
bestellt.
|
|
(1) Mr. Daniel
Grünes was appointed Managing Director of the Company with
effect as of 11.08.2014 by resolution passed by the corporate body
responsible for matters concerning directors of 11.08.2014 and
again with effect as of 01.11.2019 by resolution passed by the
corporate body responsible for matters concerning directors of
22.10.2019.
|
|
(2) Der
Geschäftsführer vertritt die Gesellschaft allein oder
zusammen mit einem anderen Geschäftsführer. Die
Gesellschaft kann die Vertretungsbefugnis jederzeit ändern und
weitere Geschäftsführer bestellen.
|
|
(2) The Managing
Director represents the Company alone or jointly with another
director. The Company is entitled to amend the authority to
represent the Company at any time and to appoint additional
managing directors.
|
|
??2 Aufgaben,
Pflichten und Verantwortlichkeiten
|
|
??2 Tasks,
duties and responsibilities
|
|
(1) Der
Geschäftsführer führt die Geschäfte der
Gesellschaft ggf. gemeinsam mit weiteren bestellten
Geschäftsführern nach Maßgabe der Gesetze, der
Satzung, der Geschäftsordnung für die
Geschäftsführung, dieses
Geschäftsführerdienstvertrags und den Weisungen des
für Geschäftsführerangelegenheiten zuständigen
Organs mit der Sorgfalt eines ordentlichen Geschäftsleiters.
Der Geschäftsführer trägt zusätzlich den Titel
Vice President of R&D and Operations. Die Gesellschaft ist
berechtigt, dem Geschäftsführer durch die
Geschäftsordnung oder im Einzelfall durch Weisung weitere
und/oder andere Aufgaben zu übertragen. Die Zuweisung
bestimmter Aufgabenbereiche entbindet den Geschäftsführer
nicht von seiner Gesamtverantwortung für die
Gesellschaft.
|
|
(0) The Managing
Director will conduct the business of the Company, if applicable
together with other appointed directors, in accordance with the
law, the articles of association, the rules of procedure for the
management board, this Director's Service Contract and the
instructions of the corporate body responsible for matters
concerning directors with the diligence of a prudent businessman.
The Managing Director shall in addition have the title of Vice
President of R&D and Operations. The Company is entitled to
assign additional and/or other duties to the Managing Director by
way of the rules of procedure or, in individual cases, by giving
him instructions. Assigning him certain duties does not relieve the
Managing Director of his overall responsibility for the
Company.
|
|
(2) Zur
Durchführung der Geschäfte, Maßnahmen und
Handlungen, die über den gewöhnlichen
Geschäftsbetrieb der Gesellschaft hinausgehen, ist die
vorherige schriftliche Zustimmung des für
Geschäftsführerangelegenheiten zuständigen Organs
einzuholen soweit solche Geschäfte, Maßnahmen und
Handlungen nicht bereits in einem von den Gesellschaftern
genehmigten Geschäftsplan für die Gesellschaft enthalten
sind. Die zustimmungspflichtigen Rechtsgeschäfte ergeben sich
aus der als Anlage 1 beigefügten Liste. Die
Gesellschaft behält sich vor, die Anlage 1
jederzeit einseitig zu ändern und zu
ergänzen.
|
|
(1) The prior written
consent of the corporate body responsible for matters concerning
directors must be obtained before executing transactions, measures
and actions that go beyond the ordinary course of the Company's
business and are not already included in a business plan for the
Company that has been approved by the shareholders. The legal
transactions requiring consent are set out in the list attached as
Schedule 1. The Company
reserves the right to change and amend Schedule 1 at any time.
|
|
(3) Auf Verlangen der
Gesellschaft ist der Geschäftsführer in angemessenem
Umfang verpflichtet, die Geschäftsführung von verbundenen
Unternehmen oder sonstige Mandate im Bei- oder Aufsichtsrat oder
ähnlichen Gremien solcher Unternehmen, sowie von
Verbänden und Vereinen, denen die Gesellschaft angehört,
ohne gesonderte Vergütung oder vertragliche Vereinbarung zu
übernehmen. Nimmt der Geschäftsführer auf
Veranlassung oder im Interesse der Gesellschaft
Aufsichtsratsmandate, Beiratsmandate oder ähnliche Mandate
oder Ämter wahr, ist er auf Verlangen der Gesellschaft
verpflichtet, diese bei Beendigung der
Geschäftsführertätigkeit niederzulegen.
|
|
(2) At the Company's
request, the Managing Director will be required within a reasonable
scope to take over the management of affiliated companies or other
functions on advisory or supervisory boards or similar bodies of
such companies, as well as of associations and societies to which
the Company belongs, without additional remuneration or a
contractual agreement. If the Director holds supervisory board
mandates, advisory board mandates or similar mandates or offices at
the instigation of or in the interest of the Company, he shall be
obliged, at the request of the Company, to resign from such
mandates or offices upon termination of his activity as
Director.
|
|
(4) Der Geschäftsführer
berichtet an den Beirat. Der Geschäftsführer wird sich
mit dem Beirat zu allen Vorgängen abstimmen, die
außerhalb des üblichen Geschäftsverlaufs liegen. Im
Zweifel hat er schriftliche Weisungen einzuholen.
|
|
(3) The Managing
Director shall report to the advisory board. The Managing Director
shall consult with the advisory board on any matter that is beyond
the ordinary operation of the business. In case of doubt, he shall
request directions in writing.
|
|
??3 Umfang
der Tätigkeit, Nebentätigkeit
|
|
??3 Scope
of activity, secondary activities
|
|
(1) Der
Geschäftsführer hat der Gesellschaft seine volle
Arbeitskraft zur Verfügung zu stellen. Grundsätzlich
erbringt der Geschäftsführer seine Tätigkeit am Sitz
der Gesellschaft, soweit nicht im gegenseitigen Einvernehmen ein
anderer Dienstsitz festgelegt wird. Es wird ausdrücklich
festgehalten, dass der Geschäftsführer seine
Tätigkeit (auch überwiegend) im Home Office verrichten
kann; der Geschäftsführer schafft hierfür geeignete
technische Voraussetzungen, weitere Kosten und sonstige
Aufwendungen fallen ihm nicht zur Last. Seine Aufgaben sind mit
Reisetätigkeit verbunden.
|
|
(0) The Managing
Director has to dedicate his full working capacity to the Company.
Generally, the Managing Director shall perform his duties at the
registered office of the Company, unless another place of business
is determined by mutual agreement. It is expressly agreed that the
Managing Director is entitled to work from his home office (also
predominantly); the Managing Director shall provide for suitable
technical conditions therefor, further costs and other expenditures
shall not be borne by him. His duties may involve business
travel.
|
|
(2) Nebentätigkeiten
des Geschäftsführers bedürfen der vorherigen
schriftlichen Zustimmung der Gesellschaft. Die Gesellschaft wird
die Zustimmung nur aus sachlichem Grund verweigern. Die in Anlage 2
aufgeführten Tätigkeiten gelten als bereits genehmigt.
Die zu der Übernahme einer Nebentätigkeit oder eines
Amtes erteilte Zustimmung ist jederzeit aus sachlichem Grund
widerruflich, wobei im Falle eines Widerrufs etwaige
Fristvorschriften für die ordnungsgemäße Beendigung
der betreffenden Tätigkeit von der Gesellschaft
berücksichtigt werden. Abweichend davon sind die in Anlage 2
aufgeführten Nebentätigkeiten nicht
widerruflich.
|
|
(1) Any secondary
activities of the Managing Director require the Company's prior
written consent. The activities listed in Schedule 2 are considered as
approved by the Company. The Company will refuse its consent only
for objective reasons. Consent granted to the performance of a
secondary activity or to the assumption of an office can be revoked
at any time for objective reasons; in such a case the Company will
take account of any provisions regarding notice periods for proper
termination of the activity concerned. Notwithstanding the
aforementioned, consent cannot be revoked with regard to the
secondary activities listed in Schedule 2.
|
|
??4 Vertragsdauer
und Kündigung, Freistellung
|
|
??4 Contractual
term, termination, release from obligation of work (garden
leave)
|
|
(1) Dieser
Vertrag tritt mit Wirkung zum Closing der Transaktion in Kraft. Er
ist auf unbestimmte Zeit geschlossen. Beide Vertragsparteien
können den Vertrag mit einer Kündigungsfrist von sechs
Monaten zum Monatsende ordentlich kündigen. Vor Beginn des
Vertrags ist die ordentliche Kündigung
ausgeschlossen.
|
|
(0) This Contract will
come into force as of closing of the Transaction. It is concluded
for an indefinite period. Either party may terminate the Contract
with a notice period of six months with effect from the end of a
month (ordentliche
Kündigung). Ordinary termination is excluded prior to
the commencement of this Director’s Service
Contract.
|
|
(2) Jede Kündigung
bedarf der Schriftform (§ 126 BGB); die elektronische
Form (§ 126a BGB) und die Textform (§ 126b BGB)
sind ausgeschlossen. Eine ohne Beachtung dieser Form ausgesprochene
Kündigung ist rechtsunwirksam.
|
|
(1) Any notice of
termination must be in the written form (section 126 German
Civil Code (BGB));
electronic form (section 126a German Civil Code (BGB)) and text form (section 126b
German Civil Code (BGB))
are excluded. Any notice of termination issued which disregards
this form will be invalid.
|
|
(3) Unbeschadet
vorstehender Regelungen endet das Anstellungsverhältnis nach
diesem Vertrag, ohne dass es des Ausspruchs einer Kündigung
bedarf, mit Ablauf des Monats, in dem der Geschäftsführer
die Voraussetzungen für den Anspruch auf eine Regelaltersrente
in der gesetzlichen Rentenversicherung erfüllt hat oder zu dem
Zeitpunkt, ab dem der Geschäftsführer eine Altersrente,
gleich aus welchem Rechtsgrund, bezieht. Das
Anstellungsverhältnis nach diesem Vertrag endet ebenfalls ohne
Kündigung mit Ablauf des Monats, in dem dem
Geschäftsführer der Bescheid eines
Rentenversicherungsträgers über eine unbefristete Rente
wegen Erwerbsminderung zugeht. Sofern der entsprechende Rentenbezug
später beginnt, endet das Anstellungsverhältnis nach
diesem Vertrag erst mit Ablauf des dem Rentenbeginn vorhergehenden
Tages. Die Gesellschaft ist unverzüglich über den Zugang
des Rentenbescheids zu informieren.
|
|
(2) Without prejudice
to the above provisions, the service relationship will end at the
end of the month in which Managing Director becomes eligible for a
pension from the federal pension insurance (because he has reached
standard retirement age) or at the time the Managing Director draws
a retirement pension regardless of the legal basis for this. The
service relationship will also end without notice of termination at
the end of the month in which Managing Director receives notice
from a pension insurance institution that he is entitled to draw a
pension for an unlimited duration based on reduced earning
capacity. If the pension concerned is not drawn until later, the
service relationship will not end until expiry of the day before
the first pension payment is due. The Company must be informed
without undue delay of the receipt of such a pension
notice.
|
|
(4) Die Gesellschaft
ist jederzeit, insbesondere im Fall der Abberufung des
Geschäftsführers oder der Kündigung des
Geschäftsführerdienstvertrags berechtigt, den
Geschäftsführer von der Verpflichtung zur Erbringung der
Dienstleistung unter Fortzahlung der vertraglich geschuldeten
Vergütung freizustellen. Der Vertrag im Übrigen wird
hiervon nicht berührt. Insoweit bestehen insbesondere die
Verschwiegenheitspflicht sowie das vertragliche Wettbewerbsverbot
fort. Während der Zeit der Freistellung gilt § 615
Satz 2 BGB.
|
|
(3) The Company is
entitled at any time, particularly in the event that Managing
Director is dis-missed from his office as director of the Company
or in the event of termination of the Director's Service Contract,
to release Director from his duty to perform his services while
continuing to pay the contractually owed remuneration. This will
not affect the remaining provisions of the Contract. In particular,
the confidentiality obligation and the contractual prohibition on
competition will remain in effect. During the garden leave period,
section 615 sentence 2 German Civil Code (BGB) applies.
|
|
(5) Das Recht zur
Kündigung des Geschäftsführerdienstvertrags aus
wichtigem Grund nach § 626 BGB bleibt
unberührt.
|
|
(4) This does not
affect the right to terminate the Director's Service Contract for
good cause in accordance with section 626 German Civil Code
(BGB).
|
|
|
|
|
|
(1) Der
Geschäftsführer erhält für das Jahr 2021
eine feste Jahresvergütung in Höhe von
EUR 105.000,00 (in Worten einhundertundfünftausend Euro)
(brutto) die in zwölf gleichen Raten jeweils am Monatsende
fällig ist. Darüber hinaus erhält der
Geschäftsführer für das Jahr 2021 eine
garantierte variable Vergütung in Höhe von
EUR 45.000,00 (in Worten fünfundvierzigtausend Euro)
(brutto), die ebenfalls in zwölf gleichen Raten jeweils am
Monatsende fällig ist. Bei unterjährigem Beginn dieses
Geschäftsführerdienstvertrags erfolgen die Leistungen
anteilig
|
|
(0) The Managing
Director will receive for the year 2021 a fixed annual
remuneration in the amount of EUR 105,000,00 (in words: one
hundred and five thousand Euro) (gross), payable in twelve equal
instalments at the end of each month. In addition, the Managing
Director receives a guaranteed variable remuneration of
EUR 45,000.00 (in words: forty five thousand Euro) (gross) for
the year 2021, which is also payable in twelve equal
instalments at the end of each month. If this Managing Director
Service Agreement commences during the course of the year, the
payments shall be made on a pro rata basis.
|
|
(2) Der
Geschäftsführer erhält ab dem Jahr 2022 eine
Jahresvergütung in Höhe von EUR 105.000,00 (in
Worten einhundertundfünftausend Euro) brutto, die in
zwölf gleichen Raten jeweils am Monatsende fällig
ist.
|
|
(1) As of the
year 2022 the Managing Director will receive a fixed annual
remuneration in the amount of EUR 105,000,00 (in words: one
hundred and five thousand Euro) (gross), payable in twelve equal
instalments at the end of each month.
|
|
(3) Darüber hinaus
erhält der Geschäftsführer ab dem Jahr 2022
für seine Tätigkeit eine variable Vergütung, die bei
einer Zielerreichung von 100 % insgesamt EUR 45.000,00
(in Worten fünfundvierzigtausend Euro) brutto beträgt.
Die für die Bemessung der variablen Vergütung relevanten
Zielvorgaben und sonstigen Bedingungen einschließlich der
Relation zwischen Zielerreichung und Bonuszahlung sowie
Fälligkeit der Leistung werden von dem für
Geschäftsführerangelegenheiten zuständigen Organ zum
Ende des Kalenderjahres für das kommende Kalenderjahr mit dem
Geschäftsführer vereinbart. Die Entscheidung über
den Auszahlungsbetrag wird von dem für
Geschäftsführerangelegenheiten zuständigen Organ
unter Berücksichtigung der Zielerreichung getroffen. Bei
unterjährigem Beginn und Ende dieses
Geschäftsführerdienstvertrags erfolgt die Leistung der
variablen Vergütung pro rata. Der variable
Vergütungsbestandteil ist nicht auf 100 % der
Zielerreichung begrenzt.
|
|
(2) In addition, the
Managing Director will receive for the year 2022 a variable
remuneration for his work per year, amounting to EUR 45.000,00
(in words: forty-five thousand Euro) (gross) if the target is fully
achieved (100 %). The relevant targets for assessing the
variable remuneration and all other terms and conditions of the
variable remuneration plan including the relation between target
achievement and amount of bonus and payment terms will be agreed
between the corporate body responsible for matters concerning
directors and the Managing Director at the end for the year for the
upcoming calendar year. The decision on the amount to be paid out
is made by the corporate body responsible for matters concerning
directors, taking into account the degree to which the targets have
been met. Where the Director's Service Contract commences during
the course of or ends before the end of the year, the variable
remuneration will be paid pro rata. Variable remuneration is not
limited to 100 % of the target achievement ("no cap at
100 %").
|
|
(4) Die Gesellschaft
sorgt dafür, dass der Geschäftsführer das Recht
erhält, am Stock Option Plan der Scientific Industries, Inc.
teilzunehmen.
|
|
(3) The Company shall
procure that the Managing Director is entitled to participate in
the Stock Option Plan of Scientific Industries, Inc.
|
|
??6 Bleibe-Prämie
|
|
??6 Retention
Bonus
|
|
(1) Der
Geschäftsführer erhält eine einmalige
Bleibe-Prämie in Höhe von EUR 10.000,00 (in Worten
zehntausend Euro) (brutto), sofern er im Zeitpunkt des Closings der
Transaktion Geschäftsführer der Gesellschaft ist. Die
Bleibe-Prämie wird mit der Gehaltsabrechnung des Monats
ausgezahlt, in dem das Closing stattfindet.
|
|
(0) The Managing
Director shall receive a retention bonus in the amount of
EUR 10,000.00 (in words: ten thousand Euro) (gross) if he is
the Managing Director of the Company at the time of the Closing of
the Transaction. The retention bonus shall be paid with the salary
statement of the month in which the Closing takes
place.
|
|
(2) Der
Geschäftsführer erhält eine weitere einmalige
Bleibeprämie in Höhe von EUR 25.000,00 (in Worten
fünfundzwanzigtausend Euro) (brutto), sofern er innerhalb der
ersten zwei Jahre nach Beginn dieses
Geschäftsführervertrages nicht seinerseits das
Dienstverhältnis kündigt oder die Gesellschaft das
Dienstverhältnis innerhalb dieses Zeitraums nicht wirksam aus
wichtigem Grund (§ 626 BGB) kündigt. Die
Bleibeprämie wird mit der Gehaltsabrechnung des Monats
ausgezahlt, in dem der Geschäftsführer eine
zweijährige Dienstzeit vollendet.
|
|
(1) The managing
director shall receive a further retention bonus in the amount of
EUR 25,000.00 (in words: twenty five thousand Euro) (gross) if
he does not terminate the service relationship within the first two
years after the commencement of this managing director contract or
the Company does not effectively terminate the managing director
contract for good cause (Section 626 German Civil Code) within
this period. The retention bonus shall be paid with the salary
statement of the month in which the managing director completes two
years of service.
|
|
??7 Todesfall
|
|
??7 Case
of death
|
|
Stirbt
der Geschäftsführer während der Dauer dieses
Geschäftsführerdienstvertrags, so haben seine Ehefrau,
sowie die gemeinsamen Kinder, soweit diese das 25. Lebensjahr
noch nicht vollendet haben und noch in der Berufsausbildung stehen,
als Gesamtgläubiger Anspruch auf Fortzahlung der Bezüge
für den Sterbemonat und die drei darauf folgenden Monate,
längstens jedoch bis zu dem Zeitpunkt in dem der Vertrag enden
würde.
|
|
If the
Managing Director dies during the term of this Director’s
Service Contract, his wife as well as the joint children, insofar
as they have not yet reached the age of 25 and are still in
education, shall be entitled as joint creditors to continued
payment of the remuneration for the month of death and the three
following months, at the latest, however, until the time at which
the contract would end.
|
|
??8 Nebenleistungen,
D&O Versicherung,Haftung
|
|
??8 Fringe
Benefits, D&O Insurance,Liability
|
|
Dem
Geschäftsführer werden ein Laptop und ein Mobiltelefon
zur dienstlichen Nutzung zur Verfügung gestellt; alternativ
zur Bereitstellung des Mobiltelefons kann ein bestehender
Mobilfunkvertrag durch die Gesellschaft übernommen
werden.
|
|
Director
shall be provided with a laptop and a mobile telephone for business
use; alternatively to the provision of the mobile telephone, an
existing mobile telephone contract may be taken over by the
Company.
|
|
Weiterhin
wird die Gesellschaft dem Geschäftsführer die
betriebliche Altersvorsorge sowie die betriebsüblichen
Nebenleistungen zukommen lassen.
|
|
In
addition the Company will provide the Managing Director with the
company pension and grant to him the fringe benefits that are
commonly provided to employees in the Company.
|
|
Die
Gesellschaft wird zu Gunsten des Geschäftsführers eine
weltweit gültige Directors’ & Officers’
Versicherung ("D&O
Versicherung") ihrer Wahl und ihrer Bedingungen
abschließen (eine Kopie der derzeitigen D&O Versicherung
liegt dem Geschäftsführer vor) und während der
Vertragslaufzeit die Versicherungsprämien zahlen. Die
Deckungssumme beträgt mindestens EUR 1.000.000,00 (in
Worten eine Million Euro).
|
|
The
Company shall provide a market standard Directors &
Officers’ insurance ("D&O
insurance") cover of its choice with worldwide validity and
according to its conditions (a copy of the current D&O policy
has been provided to the Managing Director) for the benefit of the
Managing Director and shall pay the insurance premium during the
contract period. The amount insured shall be at least
EUR 1,000,000.00 (in words: one million Euro).
|
|
Der
Geschäftsführer haftet der Gesellschaft wegen
Verletzungen seiner gesetzlichen oder vertraglichen
Verpflichtungen, die er gegenüber der Gesellschaft beachten
muss (Innenhaftung), nur dann auf Schadensersatz, wenn er die
Pflichtverletzung vorsätzlich oder grob fahrlässig
begangen hat. Ausgenommen von dieser Haftungsbeschränkung sind
Schadensersatzansprüche und andere Ansprüche, auf die
nicht verzichtet werden kann, wie z.B. Ansprüche aus
Gründerhaftung (§ 9 Abs. 1 GmbHG), aus einer
Verletzung der Kapitalerhaltungspflicht gemäß
§ 43 Abs. 3 GmbHG und Verpflichtungen des
Geschäftsführers aus § 64 GmbHG.
|
|
The
Managing Director shall be liable for damage vis a vis the Company
for any breaches of his statutory or contractual duties that he has
to observe vis a vis the Company (internal liability) only in case
the breach has been committed with intention or gross negligence.
Exempt from this limitation of liability are damage claims that
cannot be waived such as claims related to the founder’s
liability (§ 9 Abs. 1 GmbHG), breach of capital
preservation obligations according to § 43 para 3
GmbHG and obligations of the Managing Director pursuant to
§ 64 GmbHG.
|
|
??9 Ersatz
von Aufwendungen
|
|
??9 Reimbursement
of expenses
|
|
Zur
Erfüllung seiner Aufgaben hat der Geschäftsführer
Anspruch auf Ersatz seiner Reisekosten und Auslagen, die im
Interesse der Gesellschaft erforderlich waren, gegen Beleg im
Rahmen der steuerlich zulässigen Höchstsätze und im
Rahmen der Richtlinien der Gesellschaft.
|
|
For the
performance of his duties, the Managing Director is entitled to
reimbursement of his travel expenses and out-of-pocket expenses
incurred in the interest of the Company in accordance with Company
policies then in effect on submission of receipts within the
framework of the maximum permissible statutory tax
limits.
|
|
??10 Unvorhergesehene
Abwesenheit / Vergütungsfortzahlung bei Krankheit,
Unfall
|
|
??10 Unforeseen
absence/continued payment of salary in the event of illness,
accident
|
|
(1) Der
Geschäftsführer hat in jedem Fall einer unvorhergesehenen
Abwesenheit die Gesellschaft in geeigneter Art und Weise
unverzüglich hierüber sowie über den Grund und die
Dauer seiner voraussichtlichen Abwesenheit zu informieren. Dabei
hat der Geschäftsführer die Gesellschaft auf vordringlich
zu erledigende Aufgaben hinzuweisen.
|
|
(0) In any case of
unforeseen absence, the Managing Director must inform the Company
in an appropriate manner without undue delay and state the reason
for and anticipated duration of his absence. In so doing, the
Managing Director must indicate to the Company which tasks urgently
require attention.
|
|
(2) Ist der
Geschäftsführer unverschuldet krankheits- oder
unfallbedingt an der Leistung seiner Dienste verhindert, zahlt die
Gesellschaft dem Geschäftsführer für die Dauer von
sechs Wochen, längstens für die Dauer des
Geschäftsführerdienstvertrags, seine Vergütung nach
§ 5 dieses Vertrags
entsprechend den Regelungen des Entgeltfortzahlungsgesetzes
fort.
|
|
(1) If the Managing
Director is prevented from performing his duties due to illness or
accident through no fault of his own, the Company will continue to
pay the Managing Director his remuneration pursuant to § 5 of the Agreement according to the
Act on Continued Salary Payment for a period of six weeks, for the
term of the Director's Service Contract at most.
|
|
Im Fall
einer Verletzung des Geschäftsführers durch Dritte und
einer dadurch unverschuldet bedingten Dienstverhinderung tritt der
Geschäftsführer der Gesellschaft sämtliche
Ansprüche gegen den Dritten bis zu der Höhe der nach
diesem Geschäftsführerdienstvertrag von der Gesellschaft
geschuldeten Vergütungsfortzahlung ab.
|
|
If the
Managing Director is injured by a third party and prevented from
performing his duties through no fault of his own, the Managing
Director will assign to the Company all claims against the third
party up to the amount of the continued payment of remuneration
owed by the Company under this Director's Service
Contract.
|
|
??11 Erholungsurlaub
|
|
??11 Leave
|
|
(1) Der
Geschäftsführer hat Anspruch auf einen jährlichen
bezahlten Erholungsurlaub von 30 Arbeitstagen. Arbeitstage
sind alle Tage mit Ausnahme von Samstagen, Sonntagen und
gesetzlichen Feiertagen.
|
|
(0) The Managing
Director is entitled to annual paid leave of 30 working days.
Working days are all days with the exception of Saturdays, Sundays
and statutory public holidays.
|
|
(2) Die Lage und die
Dauer des Urlaubs sind mit etwaigen anderen
Geschäftsführern und mit dem für
Geschäftsführerangelegenheiten zuständigen Organ
abzustimmen.
|
|
(1) The scheduling and
duration of leave must be agreed with the other directors and with
the corporate body responsible for matters concerning
directors.
|
|
(3) Kann der
Geschäftsführer aus geschäftlichen oder in seiner
Person liegenden Gründen den Urlaub nicht oder nicht
vollständig bis zum Ablauf des jeweiligen Kalenderjahres
nehmen, so bleibt ihm der Anspruch auf Urlaub insoweit bis zum
31.03. des jeweiligen Folgejahres erhalten. Im Übrigen
verfallen Urlaubsansprüche. Eine Abgeltung von
Urlaubsansprüchen in Geld ist ausgeschlossen.
|
|
(2) If the Managing
Director is unable to take his leave in whole or in part for
business or personal reasons by the end of the respective calendar
year, he may carry over the outstanding leave until 31 March
of the following year. Otherwise, leave entitlements will be
forfeited. Leave entitlement cannot be paid out in monetary
form.
|
|
??12 Personenbezogene
Daten; Datenverarbeitung
|
|
??12 Personal
data; data processing
|
|
(1) Der
Geschäftsführer ist zum verschwiegenen Umgang mit
personenbezogenen Daten verpflichtet. Dies betrifft sowohl
personenbezogene Daten von Kollegen und Mitarbeitern als auch von
Kunden. Diese Vertraulichkeitsverpflichtung besteht auch nach
Beendigung des Anstellungsverhältnisses nach diesem Vertrag
fort. Die in der Anlage zu diesem Vertrag beigefügte
"Verpflichtung auf die Vertraulichkeit" hat der
Geschäftsführer erhalten, gelesen, verstanden und
unterzeichnet.
|
|
(0) The Managing
Director is required to treat personal data as confidential. This
applies to personal data relating to colleagues and co-workers, but
also to customers. This confidentiality obligation will continue to
apply even after the service relationship has come to an end. The
Managing Director has received, read, understood and signed the
"Confidentiality Undertaking" attached to this
Contract.
|
|
(2) Der
Geschäftsführer erklärt, die "Datenschutzhinweise
gemäß der EU-Datenschutzgrundverordnung" zur Kenntnis
genommen zu haben.
|
|
(1) The Managing
Director confirms that he has taken note of the "Information on
data privacy protection pursuant to the EU General Data Protection
Regulation".
|
|
??13 Geheimhaltung
vertraulicher Informationen, Vertragsstrafe
|
|
??13 Secrecy
of confidential information, contractual
penalty
|
|
(1) Der
Geschäftsführer verpflichtet sich, vertrauliche
Informationen der Gesellschaft im Sinne von Abs. (2) geheim zu halten (Geheimhaltungspflicht).
Es ist dem Geschäftsführer damit insbesondere untersagt,
vertrauliche Informationen der Gesellschaft:
|
|
(0) The Managing
Director undertakes to maintain confidentiality with regard to
confidential information belonging to the Company in the sense of
para. (2) (confidentiality
obligation). The Managing Director is therefore especially
prohibited from doing any of the following with confidential
information belonging to the Company:
|
|
a) unbefugten Personen
innerhalb oder außerhalb des Unternehmens der Gesellschaft
offenzulegen oder solchen unbefugten Personen den Zugriff auf die
vertraulichen Informationen zu ermöglichen,
|
|
a) disclosing it to
unauthorised persons within or outside the Company or enabling such
unauthorised persons to access it,
|
|
b) zu anderen Zwecken
als zur Erfüllung seiner vertraglichen Pflichten zu nutzen
oder zu erlangen,
|
|
b) using or obtaining
it for purposes other than performing his contractual
obligations,
|
|
c) durch das
Beobachten, Untersuchen, Rückbauen oder Testen eines nicht
öffentlich verfügbar gemachten Produkts oder Gegenstands
der Gesellschaft zu erlangen (sog. Reverse Engineering) oder dies
zu versuchen, soweit dies zur Erfüllung seiner vertraglichen
Pflichten nicht erforderlich ist, oder
|
|
c) obtaining or trying
to obtain it by observing, examining, reverse engineering or
testing a product or item belonging to the Company which has not
been made publicly available where this is not necessary for the
purpose of performing her contractual obligations, or
|
|
d) der
rechtmäßigen Kontrolle der Gesellschaft zu
entziehen.
|
|
d) removing it from
the lawful control of the Company.
|
|
Diese
Geheimhaltungspflicht erstreckt sich sowohl auf vertrauliche
Informationen der Gesellschaft, die der Geschäftsführer
rechtmäßig erlangt hat, als auch auf solche, die der
Geschäftsführer unrechtmäßig erlangt
hat.
|
|
This
confidentiality obligation includes both confidential information
of the Company which the Managing Director has lawfully obtained
and confidential information which the Managing Director has
unlawfully obtained.
|
|
(2) Vertrauliche
Informationen der Gesellschaft sind insbesondere
|
|
(1) Confidential
information of the Company includes, in particular
|
|
a) Geschäftsgeheimnisse
im Sinne von § 2 Nr. 1 Gesetz zum Schutz von
Geschäftsgeheimnissen (GeschGehG) sowie
|
|
) trade secrets
within the meaning of section 2 no. 1 German Trade
Secrets Act (GeschGehG)
and
|
|
b) sonstige
Informationen, die durch die Gesellschaft ausdrücklich als
vertraulich gekennzeichnet sind oder nach dem ausdrücklichen
oder aus den Umständen erkennbaren Willen der Gesellschaft als
vertraulich anzusehen sind.
|
|
a) other information
expressly marked as confidential by the Company or regarded as
confidential based on the express or clear (from the circumstances)
will of the Company.
|
|
Die
Parteien sind sich darüber einig, dass insbesondere die
folgenden Informationen vertrauliche Informationen der Gesellschaft
im Sinne dieses Paragraphen darstellen:
|
|
The
parties agree that the following information in particular, but
without limitation, constitutes confidential information within the
meaning of this section:
|
|
● Einkaufspreise
und Zuliefererkonditionen
|
|
● purchase
prices and supplier conditions
|
|
● Fertigungsverfahren
und Herstellungsprozesse
|
|
● manufacturing
and production processes
|
|
● Konstruktionspläne
|
|
● construction
plans
|
|
● Prototypen
|
|
● prototypes
|
|
● Algorithmen
|
|
● algorithms
|
|
● Computerprogramme
|
|
● computer
programs
|
|
● Forschungs-
und Entwicklungsschritte/-ziele/-ergebnisse
|
|
● research
and development steps/objectives/results
|
|
● Rezepturen
und Produktzusammensetzungen
|
|
● recipes
and product compositions
|
|
● Vertriebskonzepte/-konditionen/-wege
|
|
● sales
concepts/conditions/channels
|
|
● Kundenlisten
|
|
● customer
lists
|
|
● Businesspläne
und Geschäftsstrategien
|
|
● business
plans and business strategies
|
|
● Finanzplanung
|
|
● financial
planning
|
|
● Werbestrategien
|
|
● advertising
strategies
|
|
● Margen
zu den Produkten der Gesellschaft
|
|
● margins
on the Company's products
|
|
● Gehaltsstrukturen
|
|
● salary
structures
|
|
(3) Die vorstehend
geregelte Geheimhaltungspflicht über vertrauliche
Informationen der Gesellschaft, die grundsätzlich zeitlich
unbegrenzt ist und auch nach Beendigung des
Anstellungsverhältnisses fortbesteht, gilt nicht,
soweit
|
|
(2) This
confidentiality obligation concerning confidential information of
the Company, which is unlimited in time as a matter of principle
and which continues to apply after the service relationship has
come to an end, does not apply where
|
|
a) die
Informationsweitergabe mit Zustimmung der Gesellschaft erfolgt, in
deren Interesse zweifelsfrei erforderlich oder aber für die
Gesellschaft offensichtlich ohne Nachteil ist,
|
|
) the information is
passed on with the consent of the Company, where disclosure is,
without doubt, necessary in the interest of the Company or where
there is clearly no disadvantage to the Company in doing
so,
|
|
b) eine gesetzliche
Pflicht des Geschäftsführers zur Auskunft über die
jeweilige Information besteht (z.B. gegenüber dem Finanzamt,
der Arbeitsagentur oder dem Ehepartner),
|
|
a) where the Managing
Director has a statutory duty to disclose such information (e.g. to
the tax authorities, the Federal Employment Agency or his
spouse),
|
|
c) bezogen auf
Geschäftsgeheimnisse einer der in § 5 GeschGehG
geregelten Ausnahmetatbestände einschlägig
ist,
|
|
b) with regard to
trade secrets, in the case of an exemption stipulated in
section 5 German Trade Secrets Act (GeschGehG),
|
|
d) die jeweilige
Information ohne Verletzung der dem Geschäftsführer
obliegenden Geheimhaltungspflicht zum jeweiligen Zeitpunkt bereits
allgemein bekannt geworden ist,
|
|
c) at the respective
point in time, the respective information had already become public
knowledge without the Managing Director having breached his
confidentiality obligation,
|
|
e) der
Geschäftsführer die jeweilige Information nur als reines
Erfahrungswissen nutzt
|
|
d) the Managing
Director uses the respective information only for the purpose of
increasing his own expertise,
|
|
f) der
Geschäftsführer durch die Pflicht zur Geheimhaltung der
jeweiligen Information in seiner beruflichen Tätigkeit im
Sinne eines nachvertraglichen Wettbewerbsverbots gem.
§ 74 HGB beschränkt wäre oder
|
|
e) the Managing
Director would be restricted in his professional activity by the
obligation to maintain confidentiality about the respective
information within the meaning of a post-contractual prohibition on
competition pursuant to section 74 German Commercial Code
(HGB) or
|
|
g) aufgrund
Zeitablaufs oder aus sonstigen Gründen kein berechtigtes
Interesse der Gesellschaft an der Geheimhaltung der jeweiligen
Information (mehr) besteht.
|
|
f) the Company clearly
has no interest (any longer) in keeping the information concerned
confidential owing to the expiry of deadlines or for other
reasons.
|
|
(4) Bei Zweifeln
über Bestehen und Umfang der Geheimhaltungspflicht ist der
Geschäftsführer verpflichtet, eine diesbezügliche
Weisung des für ihn zuständigen Organs der Gesellschaft
einzuholen. Das gilt auch nach Beendigung des
Anstellungsverhältnisses.
|
|
(3) If the Managing
Director has any doubt as to the existence and extent of the
confidentiality obligation, he must seek an appropriate instruction
from the corporate body responsible for matters concerning
directors. This also applies after the service relationship has
come to an end.
|
|
(5) Die
Geheimhaltungspflicht erstreckt sich auch auf die in
Abs. (2) bezeichneten
vertraulichen Informationen anderer Unternehmen, mit denen die
Gesellschaft im Sinne von § 15 AktG verbunden
ist.
|
|
(4) The confidentiality
obligation also includes the confidential information pursuant to
para. (2) of other companies with
which the Company is affiliated within the meaning of
section 15 German Stock Corporation Act (AktG).
|
|
(6) Der
Geschäftsführer verpflichtet sich, vertrauliche
Informationen Dritter (z.B. eines früheren Arbeitgebers oder
eines Unternehmens, mit dem die Gesellschaft in geschäftlichem
Kontakt steht) nicht unrechtmäßig zu nutzen, zu erlangen
oder der Gesellschaft zu verschaffen. Bei Zweifeln darüber, ob
die Nutzung, Erlangung oder Verschaffung bestimmter Informationen
Dritter im Rahmen des zur Gesellschaft bestehenden
Anstellungsverhältnisses rechtmäßig wäre, ist
eine diesbezügliche Weisung des für den
Geschäftsführer zuständigen Organs der Gesellschaft
einzuholen.
|
|
(5) The Managing
Director undertakes not to unlawfully use or obtain confidential
information of third parties (e.g. a former employer or company
with which the Company has business contacts) or to procure such
confidential information for the Company. If the Managing Director
has any doubt as to whether using, obtaining or procuring certain
third-party information in the context of his service relationship
with the Company is lawful, he must seek appropriate instructions
from the corporate body responsible for matters concerning
directors.
|
|
(7) Für jeden
schuldhaften Verstoß des Geschäftsführers gegen die
in diesem Paragraphen geregelten Pflichten hat dieser eine
Vertragsstrafe in Höhe
von einem Bruttomonatsgehalt (Fix-Gehalt) an die Gesellschaft zu
bezahlen.
|
|
(6) For each culpable
breach by the Managing Director of the obligations set out in this
section, he must pay a contractual
penalty equal to one month's gross salary to the
Company.
|
|
Verstößt
der Geschäftsführer innerhalb eines Kalendermonats
mehrfach oder dauerhaft gegen seine Pflichten, so hat er jedoch nur
einmal die für diesen Kalendermonat zu zahlen. Kommt es im
Folgemonat erneut zu einem oder mehreren Verstößen, oder
dauert ein Verstoß aus dem vorausgegangenen Monat noch an, so
wird für diesen Folgemonat erneut eine Vertragsstrafe in
Höhe von einem Bruttomonatsgehalt verwirkt. Für die auf
den Folgemonat folgenden Monate gilt Entsprechendes.
|
|
If the
Managing Director breaches his duties several times or permanently
within one calendar month, however, he must pay the contractual
penalty amounting to one gross monthly salary only once for that
calendar month. If one or more breaches occur again in the
following month, or if a breach from the previous month still
persists, an additional contractual penalty equal to one month's
gross salary will become due for the subsequent month. The same
applies to the months following the subsequent month.
|
|
Weitergehende oder
andersartige Ansprüche der Gesellschaft werden von dieser
Vertragsstrafenregelung nicht berührt. Insbesondere
behält sich die Gesellschaft die Geltendmachung der in
§§ 6 ff. GeschGehG geregelten Ansprüche sowie
sonstiger einschlägiger Ansprüche (z.B. Beseitigung,
Unterlassung, Auskunft, Schadenersatz) auf anderer Rechtsgrundlage
ausdrücklich vor.
|
|
Additional or
different claims of the Company are not affected by this
contractual penalty provision. In particular, the Company expressly
reserves the right to assert the claims set out in sections 6
et seqq. German Trade Secrets Act (GeschGehG) as well as other relevant
claims (e.g. claims for removal, injunctive relief, information,
compensation) on another legal basis.
|
|
??14 Rückgabeverpflichtung
|
|
??14 Obligation
to return property
|
|
(1) Bei Aufforderung durch das
für Geschäftsführerangelegenheiten zuständige
Organ, spätestens aber in dem Zeitpunkt der Beendigung des
Anstellungsverhältnisses sowie bei der Freistellung von der
Dienstpflicht ist der Geschäftsführer verpflichtet,
unaufgefordert sämtliche mit seiner Tätigkeit in
Zusammenhang stehenden, die Angelegenheiten der Gesellschaft
betreffenden Schriftstücke, Korrespondenzen, Aufzeichnungen,
Pläne, Entwürfe, Berechnungen und dergleichen, die sich
in seinem (auch mittelbaren) Besitz befinden, unverzüglich an
die Gesellschaft an deren Sitz vollständig herauszugeben.
Diese Verpflichtung erstreckt sich auch auf Duplikate und
Ablichtungen.
|
|
(0) On request from
the corporate body responsible for matters concerning directors,
but no later than at the time when the service relationship ends
and upon being released from his duty to work, in these two cases
without awaiting a request to do so, the Managing Director will be
required to return all documents, correspondence, records, plans,
drafts, calculations and the like relating to his work and
concerning the affairs of the Company that are in his possession
– including his indirect possession (unmittelbarer Besitz) – without
undue delay and in full to the Company's registered office. This
obligation also includes duplicates and photocopies.
|
|
(2) Die
Rückgabeverpflichtung umfasst auch sämtliche im Eigentum
der Gesellschaft oderanderen mit ihr im Sinne von § 15
AktG verbundenen Gesellschaften bzw. dem Geschäftsführer
von der Gesellschaft in Ausübung seiner Tätigkeit
überlassenen Gegenstände, die Geräte der
Datenverarbeitung sowie Daten- und Programmträger,
einschließlich dem Geschäftsführer gehörender
Daten- und Programmträger, auf denen Programme der
Gesellschaft oder der Gesellschaft verbundener Unternehmen und/oder
diese Unternehmen betreffende Daten gespeichert sind. Der
Geschäftsführer wird auf Anforderung der Gesellschaft ihr
gegenüber schriftlich versichern, dass er die vorstehend
geregelten Herausgabepflichten vollständig erfüllt und
sämtliche ihm gehörende Daten und Programmträger der
vorstehend bezeichneten Art der Gesellschaft zur Löschung zur
Verfügung gestellt hat.
|
|
(1) The obligation to
return these things also includes all items owned by the Company or
any other companies affiliated with the Company within the meaning
of section 15 German Stock Corporation Act (AktG) or provided by the Company to the
Managing Director in the performance of his duties, data processing
devices and data and program carriers, including data and program
carriers belonging to the Managing Director, on which programs of
the Company or its affiliated companies and/or data relating to
these companies are stored. At the Company's request, the Managing
Director will confirm to the Company in writing that he has fully
complied with the aforementioned obligation to return property and
that he has made all data and program carriers of the type
described above available to the Company for deletion.
|
|
(3) Die Geltendmachung
eines Zurückbehaltungsrechts durch den
Geschäftsführer in Bezug auf die ihn nach Abs. (1) und (2) dieser
Regelung treffenden Herausgabepflichten ist
ausgeschlossen.
|
|
(2) The Managing
Director will not be entitled to assert a right of retention with
regard to the obligation to return property which applies to him
under para. (1) and (2) of this provision.
|
|
??15 Übertragung
von Schutzrechten
|
|
??15 Transfer
of intellectual property rights
|
|
(1) Sämtliche materiellen und
immateriellen Ergebnisse (einschließlich insbesondere
Erfindungen, dem Schutz als gewerbliches Schutzrecht [z.B. Patent,
Design, Marke], Urheberrecht [z.B. Computerprogramme] oder
verwandte Schutzrechte zugängliche Werke und Know-how) aus der
Tätigkeit des Geschäftsführers für die
Gesellschaft, sowie sämtliche Rechte hieran, (nachfolgend
"Unternehmensergebnisse"
genannt), stehen der Gesellschaft zu; zu den
Unternehmensergebnissen gehören nicht solche Rechte, die der
Geschäftsführer durch Aktivitäten außerhalb
seiner Tätigkeit für die Gesellschaft erworben hat und
die nicht in das aktive Tätigkeitsfeld der Gesellschaft
fallen. Der Geschäftsführer tritt zu diesem Zweck im
Voraus sämtliche Rechte an seinen Unternehmensergebnissen an
die Gesellschaft ab. Die Gesellschaft nimmt die Abtretung hiermit
im Voraus an. Die Gesellschaft ist berechtigt, aber nicht
verpflichtet, in eigenem Namen nach freiem Ermessen Schutzrechte
für die Unternehmensergebnisse zu beantragen.
|
|
(0) All tangible and
intangible results (including in particular inventions, works
available for protection by an intellectual property right [e.g.
patent, design, trademark], copyright [e.g. computer programs] or
neighbouring rights and know-how) from the activity of the Managing
Director for the Company, as well as all rights thereto
(hereinafter referred to as "Company Results"), shall belong to the
Company; whereby any rights the Managing Director has acquired
through activities outside of his work for the Company and that do
not fall into the active scope of business of the Company do not
belong to the Company Results. For this purpose, the Managing
Director assigns in advance all rights to his Company Results to
the Company. The Company hereby accepts the assignment in advance.
The Company shall have the right, but not the obligation, to apply
for intellectual property rights in the Company Results in its own
name and at its own discretion.
|
|
(2) Sofern und in dem
Umfang eine Übertragung von Unternehmensergebnissen nach
Abs. (1) aus rechtlichen
Gründen nicht möglich ist, insbesondere bei durch
Urheberrecht oder verwandte Schutzrechte geschützten Werken,
überträgt der Geschäftsführer hiermit im Voraus
der Gesellschaft unwiderruflich ein ausschließliches,
zeitlich, inhaltlich und räumlich unbeschränktes,
übertragbares und unterlizenzierbares Nutzungsrecht an den
entsprechenden Unternehmensergebnissen für alle bekannten und
unbekannten Nutzungsarten. Das Nutzungsrecht schließt
insbesondere das Recht ein, die Unternehmensergebnisse
abzuändern oder zu bearbeiten oder in sonstiger Weise zu
gestalten und sie im Original oder in abgeänderter,
bearbeiteter oder umgestalteter Form zu nutzen, insbesondere zu
vervielfältigen, zu veröffentlichen, zu verbreiten,
vorzuführen, zu übertragen, sie der Öffentlichkeit
zugänglich zu machen und/oder sie zum Betrieb auf bzw. mit
Datenverarbeitungsanlagen und Datenverarbeitungsgeräten zu
nutzen. Eine Verpflichtung der Gesellschaft zur Ausübung des
Nutzungsrechts besteht nicht.
|
|
(1) If and to the
extent that a transfer of Company Results pursuant to
para. (1) is not possible for
legal reasons, in particular in the case of works protected by
copyright or neighbouring rights, the Managing Director hereby
irrevocably assigns to the Company in advance an exclusive,
transferable and sub-licensable right of use, unrestricted in terms
of time, content and territory, to all such Company Results for all
known and unknown types of use. The right of use includes in
particular the right to modify or edit the Company Results or to
design them in any other way and to use them in the original or in
modified, edited or altered form, in particular to reproduce,
publish, distribute, perform, transmit, make them available to the
public and/or to use them for operation on or with data processing
systems and data processing devices. The Company shall not be
obliged to exercise the right of use.
|
|
(3) Der Bestand der
Übertragung der Unternehmensergebnisse gemäß
Abs. (1) sowie des Nutzungsrechts
nach Abs. (2) sind von der Dauer
und Wirksamkeit des Anstellungsverhältnisses des
Geschäftsführers unabhängig. Dies gilt auch für
Nutzungen außerhalb des unternehmerischen
Tätigkeitsbereichs der Gesellschaft.
|
|
(2) The validity of
the transfer of the Company Results according to
para. (1) as well as the right of
use according to para. (2) are
independent of the duration and effectiveness of the employment
relationship of the Managing Director. This shall also apply to
uses outside the entrepreneurial sphere of activity of the
Company.
|
|
(4) Sämtliche
Unternehmensergebnisse des Geschäftsführers sind
Bestandteil der Arbeitsaufgabe des Geschäftsführers im
Sinne dieses Anstellungsvertrages. Die Übertragung nach
Abs. (1) und die Einräumung
von Nutzungsrechten nach Abs. (2)
ist mit der Vergütung nach Maßgabe von § 5 dieses Anstellungsvertrages
vollständig abgegolten. Satz 2 von Abs. (3) gilt entsprechend. Ein zusätzlicher
Vergütungsanspruch des Geschäftsführers besteht
nicht.
|
|
(3) All Company Results
by the Managing Director are part of the Managing Director's work
task within the meaning of this contract of employment. The
transfer pursuant to para. (1) and
the granting of the right to use pursuant to para. (2) shall be fully compensated with the
remuneration in accordance with § 5 of this Contract of Employment.
Sentence 2 of para. (3)
applies accordingly. The Managing Director shall have no additional
claim to remuneration.
|
|
(5) Sofern für die
Erlangung von Schutzrechten für die Unternehmensergebnisse,
deren Aufrechterhaltung, Verteidigung oder Durchsetzung durch die
Gesellschaft Erklärungen, die Unterschrift und/oder sonstige
Mitwirkungshandlungen des Geschäftsführers erforderlich
sind, wird der Geschäftsführer diese unentgeltlich und
binnen angemessener Frist abgeben bzw. vornehmen.
|
|
(4) If declarations,
signatures and/or other acts of cooperation by the Managing
Director are required for the obtaining, maintenance, defence or
enforcement of intellectual property rights for the Company
Results, the Managing Director shall provide these free of charge
and within a reasonable period of time.
|
|
(6) Der
Geschäftsführer ist damit einverstanden, dass die
Gesellschaft von einer Namensnennung des Geschäftsführers
− insbesondere einer Urheberbenennung − absieht, sofern
dies der Branchenüblichkeit entspricht oder dies als Ergebnis
einer Abwägung der Interessen der Gesellschaft mit den
Interessen des Geschäftsführers gerechtfertigt
ist.
|
|
(5) The Managing
Director agrees that the Company may refrain from naming the
Managing Director – in particular from naming the author
– if this is in line with customary practice in the industry
or if this is justified as a result of weighing the interests of
the Company against the interests of the Managing
Director.
|
??16 Vertragliches
Wettbewerbsverbot
|
|
??16 Contractual prohibition on
competition
|
|
(1) Während der Dauer des
Geschäftsführerdienstvertrags ist es dem
Geschäftsführer untersagt, in selbständiger,
unselbständiger oder sonstiger Weise für ein anderes
Unternehmen oder einen Dritten tätig zu werden, soweit diese
mit der Gesellschaft oder einem mit der Gesellschaft verbundenes
Unternehmen in direktem oder in indirektem Wettbewerb stehen. Als
solche Unternehmen gelten nur die Unternehmen die sich mit der
Entwicklung, Produktion sowie dem Vertrieb oder Verkauf von
Geräten und Software zur Durchführung zellulärer
Bioprozesse befassen.
|
|
(0) During the term
of the Director's Service Contract, the Managing Director will not
be permitted to work for another company or third party in an
independent, dependent or other manner that are in direct or
indirect competition with which the Company or an affiliated
company. Such companies are only those that engage in the
development, production, distribution or sale of devices and
software for the performance of cellular bioprocesses.
|
|
(2) Ebenfalls ist es
dem Geschäftsführer untersagt, während der Dauer des
Geschäftsführerdienstvertrags ein Unternehmen zu
errichten, zu erwerben oder sich an ihm zu beteiligen, dass
entsprechend § 16
Abs. (1) im Wettbewerb mit der
Gesellschaft oder einem mit ihr verbundenen Unternehmen steht. Der
Kauf von Aktien und/oder Geschäftsanteilen, die höchstens
5 % der Geschäftsanteile ausmachen, wird durch die oben
genannte Beschränkung nicht unterbunden.
|
|
(1) Likewise, the
Managing Director during the term of this Director's Service
Contract may not establish, acquire or participate in any such
company that stands in competition to the Company or an affiliated
company according to § 16
para. (1). The aquisition of
shares of stock and/or business interests, which amounts to
5 % or less of the business interests, is not barred by to the
above restraint.
|
|
??17 Ablösung
bisheriger Vertrag
|
|
??17 Supersedence
of previous agreements
|
|
Dieser
Geschäftsführerdienstvertrag regelt die
Vertragsbeziehungen der Parteien abschließend und ersetzt alle
vorangegangenen mündlichen und schriftlichen Abreden oder
Vereinbarungen des Geschäftsführers mit der Gesellschaft
oder der mit ihr verbundenen Unternehmen, insbesondere evtl.
bestehende Arbeits- oder Dienstverträge, die hiermit
aufgehoben werden. Die Gesellschaft handelt hierbei in Vollmacht
für die betroffenen mit ihr verbundenen
Unternehmen.
|
|
This
Director's Service Contract governs all the contractual
relationships between the parties conclusively and supersedes all
previous oral and written understandings or agreements between the
Managing Director and the Company or its affiliated companies,
particularly any employment contracts or service contracts which
may exist, which are hereby terminated. The Company is acting on
behalf of the affiliated companies concerned in this
respect.
|
|
??18 Ausschlussfrist
|
|
??18 Preclusion
period
|
|
(1) Sämtliche Ansprüche
aus diesem Anstellungsverhältnis sowie sämtliche
Ansprüche, die mit diesem Anstellungsverhältnis in
Zusammenhang stehen, müssen innerhalb von drei Monaten nach
ihrer Fälligkeit in Textform (§ 126b BGB) geltend
gemacht werden. Werden sie nicht form- und/oder fristgerecht
geltend gemacht, so verfallen sie.
|
|
(0) All claims
arising from this service relationship and all claims in connection
with this service relationship must be asserted in text form
(section 126b German Civil Code (BGB)) within three months of becoming
due. If they are not asserted in the correct form by the time
limit, they will lapse.
|
|
(2) Lehnt die in
Anspruch genommene Partei den Anspruch in Textform ab oder
erklärt sie sich nicht innerhalb von drei Wochen nach
Geltendmachung des Anspruchs, so verfällt der Anspruch
wiederum, wenn er nicht innerhalb von drei Monaten nach der
Ablehnung oder dem Ablauf der vorstehend vorgesehenen
Dreiwochenfrist gerichtlich geltend gemacht wird.
|
|
(1) If the party
against which the claim is asserted rejects the claim in text form
or does not state its position within three weeks after assertion
of the claim, the claim will be forfeited if it is not asserted in
court within three months after rejection or after the end of the
aforementioned three-week period.
|
|
(3) Von den
vorstehenden Abs. (1) und (2) und dem Verfall ausgenommen sind
Ansprüche aus Haftung wegen vorsätzlichen Handelns. Sie
gelten darüber hinaus nicht für Ansprüche aus der
Verletzung des Lebens, des Körpers oder der Gesundheit,
für Ansprüche, die aus einer grob fahrlässigen
Pflichtverletzung der Gesellschaft, eines gesetzlichen Vertreters
oder eines Erfüllungsgehilfen resultieren, sowie für
unabdingbare gesetzliche Ansprüche.
|
|
(2) Claims on grounds
of liability for intent are excluded from para. (1) and (2) above.
They do not apply to claims arising from injury to life and limb or
health or to claims which result from a grossly negligent breach by
the Company, one of its statutory representatives or a vicarious
agent.
|
|
??19 Nebenabreden,
Schriftform
|
|
??19 Side
agreements, written form
|
|
Nebenabreden
wurden nicht getroffen. Änderungen und Ergänzungen dieses
Vertrags bedürfen zu ihrer Wirksamkeit der Schriftform
(§ 126 BGB); die elektronische Form (§ 126a
BGB) und die Textform (§ 126b BGB) sind ausgeschlossen.
Dies gilt auch für die Aufhebung, Änderung oder
Ergänzung des Schriftformerfordernisses selbst. Individuelle
Vereinbarungen haben stets Vorrang und gelten auch ohne Beachtung
des Formerfordernisses (§ 305b BGB).
|
|
No side
agreements have been concluded. Any amendments and additions to
this Contract require written form to be valid (section 126
German Civil Code (BGB)); the electronic form (section 126a
German Civil Code) and text form (section 126b German Civil
Code) are excluded. This also applies to revoking, amending or
supplementing the written form requirement itself. Individual
agreements always take precedence and apply regardless of the
written form requirement (section 305b German Civil Code
(BGB)).
|
|
??20 Ausschluss
Urkundenprozess
|
|
??20 Exclusion
of proceedings based entirely on documentary
evidence
|
|
Keine
Partei ist berechtigt, Ansprüche aus oder im Zusammenhang mit
diesem Geschäftsführerdienstvertrag im Wege des
Urkundenprozesses gemäß §§ 592 ff. ZPO
geltend zu machen.
|
|
Neither
party is entitled to assert claims arising from or in connection
with this Director's Service Contract by way of proceedings based
entirely on documentary evidence pursuant to sections 592 et
seqq. German Code of Civil Procedure (ZPO).
|
|
??21 Anwendbares
Recht/Sprachen
|
|
??21 Applicable
Law/Languages
|
|
(1) Dieser
Vertrag unterliegt deutschem Recht.
|
|
(0) This Agreement is
governed by German law.
|
|
(2) Der Vertrag ist in
Deutsch und Englisch aufgesetzt. Rechtlich maßgeblich ist
ausschließlich die deutsche Fassung.
|
|
(1) This Agreement has
been drawn up in German and in English. Only the German version is
authoritative.
|
|
??22 Salvatorische
Klausel, Teilnichtigkeitsklausel
|
|
??22 Severability/partial
nullity
|
|
Sollte
eine Bestimmung dieses Geschäftsführerdienstvertrags ganz
oder teilweise unwirksam oder undurchführbar sein oder werden,
so wird hierdurch die Wirksamkeit der übrigen Bestimmungen
dieses Geschäftsführerdienstvertrags nicht berührt.
Die Parteien sind in einem solchen Fall verpflichtet, die
unwirksame oder undurchführbare Bestimmung durch eine
rechtlich zulässige bzw. durchführbare Bestimmung zu
ersetzen, welche dem wirtschaftlich verfolgten Zweck der
unwirksamen bzw. undurchführbaren Bestimmung am nächsten
kommt. Dasselbe gilt für den Fall, dass der
Geschäftsführerdienstvertrag eine an sich notwendige
Regelung nicht enthält.
|
|
If any
provision of this Director's Service Contract should be or become
invalid or unenforceable in whole or in part, this will not affect
the validity of the other provisions of this Director's Service
Contract. In such case, the invalid or unenforceable provision will
be replaced by a legally admissible or enforceable provision that
comes as close as possible to the intended purpose of the invalid
or unenforceable provision. The same applies if the Director's
Service Contract does not contain a provision that is actually
necessary.
|
|
_________________,
___________
|
|
_________________,
___________
|
|
|
|
|
|
aquila biolabs GmbH
|
|
Daniel Grünes
|
Anlage
1 Katalog zustimmungspflichtiger
Rechtsgeschäfte
|
|
Schedule
1 Legal
transactions requiring consent
|
|
Zur
Durchführung der Geschäfte, Maßnahmen und
Handlungen, die über den gewöhnlichen
Geschäftsbetrieb der Gesellschaft hinausgehen, ist die
vorherige schriftliche Zustimmung des für
Geschäftsführerangelegenheiten zuständigen Organs
einzuholen. Dies gilt derzeit insbesondere, aber ohne
Beschränkung auf diese Aufzählung, für folgende
Maßnahmen
|
|
The
prior written consent of the corporate body responsible for matters
concerning directors must be obtained before executing material
transactions, measures and actions and transaction, measures and
actions that go beyond the ordinary course of the Company's
business. This especially, but without limitation, applies to the
following:
|
|
● Veräußerung
und Stilllegung von Betrieben oder wesentlichen
Betriebsteilen.
|
|
● Selling
and closing businesses or major parts thereof.
|
|
● Errichtung
von Zweigniederlassungen.
|
|
● Establishing
branches.
|
|
● Gründung,
Erwerb oder Veräußerung von anderen Unternehmen,
Betrieben oder Beteiligungen der GmbH an anderen Unternehmen oder
jeweils Teilen hiervon.
|
|
● Founding,
acquiring or selling other undertakings, business units or holdings
of the GmbH in other undertakings or in each case parts
thereof.
|
|
● Erwerb,
Veräußerung und Belastung von Grundstücken und
grundstücksgleichen Rechten sowie die Verpflichtung zur
Vornahme solcher Rechtsgeschäfte.
|
|
● Acquiring,
selling and encumbering real estate and similar rights and
undertaking to enter into legal transactions of this
type.
|
|
● Bauliche
Maßnahmen
|
|
● Carrying
out construction measures.
|
|
● Abschluss,
Änderung oder Aufhebung von Miet-, Pacht- oder
Leasingverträgen
|
|
● Concluding,
amending or terminating/rescinding lease, usufructuary lease or
leasing agreements.
|
|
● der
Abschluss, die Änderung und die Kündigung von
wesentlichen Lizenzverträgen oder sonstigen Verträgen mit
einem Wert von über EUR 25.000,00;
|
|
● the
execution, alteration or termination of material licensing
agreements or other agreements with a value exceeding
EUR 25,000.00;
|
|
● Inanspruchnahme
oder Gewährung von Krediten oder Sicherheitsleistungen
jeglicher Art. Hiervon ausgenommen sind die laufenden Warenkredite
im gewöhnlichen Geschäftsverkehr mit Kunden und
Lieferanten der GmbH.
|
|
● Taking
out or providing loans or collateral of any kind. This does not
include the ongoing commercial loans in the usual course of
business with the GmbH's customers and suppliers.
|
|
● Übernahmen
von Bürgschaften jeder Art.
|
|
● Assuming
guarantees of any kind.
|
|
● Einstellung
und Entlassung von Angestellten und Beratern soweit die
Jahreszielvergütung EUR 75.000,00 übersteigt.
Bewilligung von Gehaltserhöhungen die jährlich 5 %
übersteigen und zusätzlichen
Vergütungen.
|
|
● Engaging
and dismissing employees and consultants as far as the annual
target remuneration exceeds EUR 75,000.00. Approving salary
increases that exceed 5 % annually and additional
remuneration.
|
|
● Erteilung
von Versorgungszusagen mit Ausnahme von
Entgeltumwandlungsvereinbarungen auf die Mitarbeiter einen
gesetzlichen Anspruch haben und anderen über die bestehenden
vertraglichen Vereinbarungen hinausgehende Vergütungszusagen
jedweder Art;
|
|
● Issuing
pension commitments, with the exception of agreements on salary
conversion that the employees can claim n a statutory basis, and
any other remuneration or benefit commitments of any type in
addition to the contractually agreed remuneration and
benefits;
|
|
● Anschaffungen
und Investitionen, wenn die Anschaffungs- oder Herstellungskosten
EUR 25.000,00im Einzelfall oder im Geschäftsjahr
übersteigen;
|
|
● purchases
and investments if the investment or production costs exceed
EUR 25,000.00per case or per financial year;
|
|
● Erteilung
und Widerruf von Prokuren und Handlungsvollmachten.
|
|
● Granting
and revoking general commercial powers of representation (Prokura)
and commercial powers of attorney.
|
|
Das
für Geschäftsführerangelegenheiten zuständige
Organ der Gesellschaft bleibt berechtigt, den Katalog
zustimmungspflichtiger Geschäfte zu ändern.
|
|
● The
body responsible for matters concerning directors is entitled to
change the list of transactions requiring consent.
|
Anlage
2 Unwiderruflich genehmigte Nebentätigkeiten
des Geschäftsführers
|
|
Schedule
2 Irrevocably
approved secondary activities of the managing
director
|
|
Bereits
vor der in der Präambel des
Geschäftsführeranstellungsvertrages benannten Transaktion
führte der Geschäftsführer Nebentätigkeiten
aus, errichtete weitere Unternehmen und übernahm dort oder in
mit den weiteren Unternehmen verbundenen Unternehmen
Organfunktionen.
|
|
Before
the transaction named in the preamble to the managing director's
employment agreement, the managing director performed secondary
activities, established other companies and assumed board functions
there or in companies affiliated with the other
companies.
|
|
Gemäß
§ 3 Abs. (2) des
Geschäftsführeranstellungsvertrages gelten die
nachfolgend aufgelisteten Tätigkeiten und Funktionen als
unwiderruflich genehmigt.
|
|
Pursuant
to § 3 para. (2) of the Executive Employment Agreement,
the activities and functions listed below are deemed to have been
irrevocably approved.
|
|
● Unbegrenzte
Beteiligung an, gesellschafterische Tätigkeit für und
Übernahme von Organfunktionen in der Viridi Familienholding
GmbH (die "Holding"), soweit diese Tätigkeiten
entsprechend § 16
Abs. (1) nicht im Wettbewerb mit
der Gesellschaft oder einem mit ihr verbundenen Unternehmen
steht.
|
|
● Unlimited
participation in, corporate activity for and assumption of board
functions in Viridi Familienholding GmbH (the "Holding"), insofar as these activities
are not in competition with the Company or a company affiliated
with it, in accordance with § 16 para. (1).
|
|
● Übernahme
von Organfunktionen und geringfügigen
Beschäftigungsverhältnissen in Beteiligungen und/oder
verbundenen Unternehmen der Holding, soweit diese Tätigkeiten
entsprechend § 16
Abs. (1) nicht im Wettbewerb mit
der Gesellschaft oder einem mit ihr verbundenen Unternehmen
stehen.
|
|
● Assumption
of board functions and minor employment relationships in
participations and/or affiliated companies of the Holding, insofar
as these activities are not in competition with the Company or an
affiliated company in accordance with § 16 para. (1).
|
|
● Tätigkeiten
als Berater, Mentor, Redner, Autor, Honorarlehrkraft,
Mandatsträger in Unternehmen, Kontrollorganen und Vereinen,
soweit diese Tätigkeiten entsprechend § 16 Abs. (1) nicht im Wettbewerb mit der Gesellschaft
oder einem mit ihr verbundenen Unternehmen stehen.
|
|
● Activities
as a consultant, mentor, speaker, author, honorary lecturer, holder
of mandates in companies, supervisory bodies and associations,
provided that these activities are not in competition with the
Company or an affiliated company in accordance with § 16 para. (1).
|
|
● Tätigkeit
in angemessenem Rahmen für die Selectrion GmbH, soweit diese
mit der Tätigkeit als Geschäftsführer der
Gesellschaft vereinbar ist.
|
|
● Activities
in a reasonable scope for Selectrion GmbH, insofar as these do not
conflict with the managing director's role.
|
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN
RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE SECURITIES PURCHASED HEREUNDER MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
AND OTHER APPLICABLE LAWS PURSUANT TO REGISTRATION OR EXEMPTION
FROM REGISTRATION REQUIREMENTS THEREUNDER.
SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (the “Agreement”) is entered
into as of April [__], 2021 by and among Scientific Industries,
Inc., a Delaware corporation (the “Company”), and each of
the purchasers, severally and not jointly, listed on Annex A hereto (collectively,
the “Purchasers” and each, a
“Purchaser”).
BACKGROUND
The
Company proposes to acquire all the registered share capital of
aquila biolabs GmbH, a German limited liability company (the
“Acquisition”).
The
Company desires to sell, and each Purchaser desires to purchase,
shares of the Company’s common stock, par value $0.05 per
share (the “Common
Stock”) and warrants to purchase shares of Common
Stock, on the terms and subject to the conditions contained herein,
and to apply the purchase price received for the shares of Common
Stock to the purchase price payable by the Company in the
Acquisition.
The
issuance of the shares of Common Stock and warrants to purchase
shares of Common Stock hereunder is being made in a private
placement, without registration under the Securities Act of 1933,
as amended (the “Securities Act”) or any
other applicable securities Laws (as defined below), in reliance on
one or more exemptions from registration and other requirements
thereunder.
Therefore, in
consideration of the foregoing, and the representations,
warranties, covenants and conditions set forth below, the parties
hereto, intending to be legally bound, hereby agree as
follows:
1. Purchase and Sale of Common
Stock.
1.1 Sale and Issuance of Common
Stock. Subject to the terms and conditions of this
Agreement, each Purchaser agrees, severally and not jointly, to
purchase at the Closing (as defined below), and the Company agrees
to sell and issue to the several Purchasers at the Closing, that
number of shares of Common Stock, and warrants to purchase that
number of shares of Common Stock (“Warrants”), in each case
set forth opposite such Purchaser’s name on Annex A hereto, at a purchase
price of $4.75 per share. The shares of Common Stock to be issued
and sold by the Company to the Purchasers pursuant to this
Agreement are collectively referred to herein as the
“Shares”, the shares of
Common Stock issuable upon exercise of the Warrants are
collectively referred to herein as the “Warrant Shares”
and the Shares, Warrants and Warrant Shares are collectively
referred to herein as the “Securities”.
1.2 Closing. The consummation of
the purchase and sale of the Securities and other transactions
contemplated hereby (the “Closing”) shall take
place at the offices of Reitler Kailas & Rosenblatt LLC, 885
Third Avenue, 20th Floor, New York, NY
10022, at 9:00 a.m. Eastern time, as promptly as practicable (but
no more than two business days) following the first date on which
all conditions set forth in Section 5 and Section 6 hereof have been
satisfied or waived (other than those conditions that by their
nature are to be satisfied by actions taken at the Closing), or at
such other time and place as the Company and the Purchasers shall
mutually agree (the date that the Closing occurs, the
“Closing
Date”). At the Closing, the Company shall (i) issue to
each Purchaser (and deliver a book-entry confirmation by the
Company’s transfer agent) that number of Shares set forth
opposite such Purchaser’s name on Annex A hereto in book-entry
form and (ii) deliver to each Purchaser a Warrant, the form of
which is attached hereto as Exhibit A, to purchase that
number of shares of Common Stock set forth opposite such
Purchaser’s name on Annex A hereto, against payment
of the purchase price therefor by such Purchaser to the Company by
wire transfer of immediately available funds to one or more
accounts designated by the Company. At the Closing, each Purchaser
and the Company shall execute and deliver the Registration Rights
Agreement among the Company and each Purchaser, the form of which
is attached hereto as Exhibit B (the
“Registration Rights
Agreement”).
2. Representations and Warranties of the
Company. The Company represents and warrants to each
Purchaser as of the date hereof and as of the Closing Date
that:
2.1 Organization, Good Standing and
Qualification. Each of the Company and its Subsidiaries is
duly incorporated or organized (as applicable), validly existing,
and in good standing under the Laws of the state of its
incorporation or organization (as applicable); has all corporate,
partnership or limited liability company (as applicable) power and
authority to own its properties and conduct its business as
presently conducted; and is duly qualified to do business and in
good standing in each state in the United States of America where
its business requires such qualification, except where failure to
qualify would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
2.2 Authorization; Enforceability.
The Company has all necessary power and authority to execute,
deliver, and perform under this Agreement, the Warrants and the
Registration Rights Agreement. All corporate action by and on
behalf of the Company necessary for the authorization, execution,
and delivery of this Agreement, the Warrants and the Registration
Rights Agreement, the performance of all obligations of the Company
hereunder and thereunder, and the authorization, issuance, sale,
and delivery of the Securities to each Purchaser hereunder has been
taken. This Agreement, the Warrants and the Registration Rights
Agreement, when executed and delivered by the Company, assuming due
authorization, execution, and delivery by each Purchaser,
constitutes and will constitute valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to: (i) Laws
limiting the availability of specific performance, injunctive
relief, and other equitable remedies; (ii) bankruptcy, insolvency,
reorganization, moratorium, or other similar Laws now or hereafter
in effect generally relating to or affecting creditors’
rights generally; and (iii) limitations on the enforceability of
indemnification provisions contained in the Registration Rights
Agreement (collectively, the “Enforceability
Exceptions”).
2.3 SEC Reports; Financial
Statements. Except as set forth on Schedule 2.3 hereto, the
Company has filed all reports, schedules, forms, statements and
other documents required to be filed by the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”), including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (the foregoing
materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to
herein as the “SEC
Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act,
as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Company has never
been an issuer subject to Rule 144(i) under the Securities Act. The
financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
2.4 Transactions With Affiliates and
Employees. Except as set forth in the SEC Reports, none of
the officers or directors of the Company or any Subsidiary and, to
the Knowledge of the Company, none of the employees of the Company
or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees,
consultants, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or
lending of money to or otherwise requiring payments to or from any
officer, director or such employee or, to the Knowledge of the
Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner, in each case in excess of
$120,000 other than for (i) payment of salary or consulting fees
for services rendered, (ii) reimbursement for expenses incurred on
behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the
Company.
2.5 Sarbanes-Oxley; Internal Accounting
Controls. The Company and the Subsidiaries are in compliance
in all material respects with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date
hereof, and any and all applicable rules and regulations
promulgated by the Securities and Exchange Commission (the
“SEC”)
thereunder that are effective as of the date hereof. The Company
and the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company and the Subsidiaries have
established “disclosure controls and procedures” (as
defined in Rules 13a-15(e) and 15d-15(e) promulgated under the
Exchange Act) for the Company and the Subsidiaries and designed
such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the SEC’s
rules and forms. The Company’s certifying officers have
evaluated the effectiveness of the disclosure controls and
procedures of the Company and the Subsidiaries as of the end of the
period covered by the most recently filed periodic report under the
Exchange Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the internal control
over financial reporting (as such term is defined in the Exchange
Act) of the Company and its Subsidiaries that have materially
affected the internal control over financial reporting of the
Company and its Subsidiaries.
2.6 Indebtedness. Neither the
Company nor any of its Subsidiaries is in default in the payment of
any Indebtedness or in default under any agreement relating to its
Indebtedness or under any mortgage, deed of trust, security
agreement, or lease to which it is a party, other than defaults
that would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
2.7 Litigation. There is no action,
suit, proceeding, or investigation pending or, to the Knowledge of
the Company, overtly threatened against, nor any outstanding
judgment, order, or decree against, the Company or any of its
Subsidiaries before or by any Governmental Authority or arbitral
body which in the aggregate have, or if adversely determined, would
reasonably be expected to have, a Company Material Adverse
Effect.
2.8 Title. Each of the Company and
its Subsidiaries has good and marketable title to its properties
that are real property and good and valid title to all of its other
properties (other than negligible assets that are immaterial to the
operations of the Company or any of its Subsidiaries), free and
clear of all Liens, except (i) for Permitted Liens and (ii) as
would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect.
2.9 Taxes. Each of the Company and
its Subsidiaries has filed all material tax returns required to
have been filed and paid all material taxes shown thereon to be
due, except for those for which extensions have been obtained and
which are being contested in good faith by appropriate proceedings
and in respect of which adequate reserves are maintained by the
Company and its Subsidiaries in accordance with GAAP.
2.10 Governmental
Consents. No consent, approval, order, or authorization of,
or registration, qualification, declaration, or filing with, any
Governmental Authority on the part of the Company is required in
connection with the offer, sale, or issuance of the Securities to
each Purchaser hereunder or the consummation of the transactions
contemplated hereby, except for the following: (i) the compliance
with other applicable state securities Laws, which compliance will
have occurred within the appropriate time periods therefor and (ii)
the filing with the SEC of such reports under the Exchange Act
and/or the Securities Act as may be required in connection with
this Agreement and the transactions contemplated by this
Agreement.
2.11 Permits
and Licenses. The Company and each of its Subsidiaries
possess all permits, certificates, licenses and other
authorizations of Governmental Authorities that are required to
conduct its business, except for such permits, certificates,
licenses or other authorizations the absence of which would not,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
2.12 Valid
Issuance of Common Stock. The Shares being purchased by each
Purchaser hereunder, when issued, sold, and delivered in accordance
with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid, and
nonassessable, and will be free of restrictions on transfer other
than restrictions under applicable state and federal securities
Laws. The Warrant Shares, when issued
in accordance with the terms of the Warrants for the
consideration expressed therein, will be duly and validly issued,
fully paid, and nonassessable, and will be free of restrictions on
transfer other than restrictions under applicable state and federal
securities Laws. The Company has
reserved from its duly authorized capital stock the maximum number
of shares of Common Stock issuable pursuant to this Agreement and
the Warrants.
2.13 Capitalization.
The authorized capital stock of the Company consists of 10,000,000
shares of Common Stock, of which 2,862,263 were issued and
outstanding as of April 16, 2021 (excluding the Shares to be issued
pursuant to this Agreement). As of the close of business on April
16, 2021, the Company has reserved an aggregate of 1,250,000 shares
of Common Stock for issuance pursuant to the Company’s 2002
Stock Option Plan and 2012 Stock Option Plan, under which (i)
964,757 shares have been issued and are reflected in the currently
outstanding Common Stock and (ii) 285,243 shares remain available
for future grant. All issued and outstanding shares of Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable. There are also outstanding warrants to purchase
1,349,850 shares of Common Stock. Other than as provided in this
Agreement, there are no other outstanding rights, options,
warrants, preemptive rights, rights of first offer, or similar
rights for the purchase or acquisition from the Company of any
securities of the Company, nor are there any commitments from the
Company to issue or execute any such rights, options, warrants,
preemptive rights, or rights of first offer. There are no
outstanding rights or obligations of the Company to repurchase or
redeem any of its securities.
2.14 Private
Placement. Assuming that the representations of each
Purchaser set forth in Section 3 hereof are true and
correct, the offer, sale, and issuance of the Securities in
conformity with the terms of this Agreement are (i) exempt from the
registration requirements of Section 5 of the Securities Act, and
all applicable state securities Laws, (ii) exempt from the
requirement to publish a securities prospectus in compliance with
the Prospectus Regulation of the European Union (Regulation (EU)
2017/1129 – the “Prospectus Regulation”). Neither
the Company nor any person acting on behalf of the Company has
offered or sold any of the Securities by any form of general
solicitation or general advertising. The Company has offered the
Securities for sale only to the Purchasers and certain other
“accredited investors” within the meaning of Rule 501
under the Securities Act. None of the Company, any of its
predecessors, any affiliated issuer, any director, executive
officer, other officer of the Company participating in the offering
of the Securities, any beneficial owner of 20% or more of the
Company’s outstanding voting equity securities, calculated on
the basis of voting power, nor any promoter (as that term is
defined in Rule 405 under the Securities Act) connected with the
Company in any capacity at the time of sale (each, an
“Issuer Covered
Person”) is subject to any of the “Bad
Actor” disqualifications described in Rule 506(d)(1)(i) to
(viii) under the Securities Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or
(d)(3). The Company has exercised reasonable care to determine
whether any Issuer Covered Person is subject to a Disqualification
Event. The Company has complied, to the extent applicable, with its
disclosure obligations under Rule 506(e), and has furnished to the
Purchasers a copy of any disclosures provided
thereunder.
In
relation to each member state of the European Economic Area, each
of which is referred to as a “Member State”, no offer
of Shares which are the subject of the offering has been, or will
be, made to the public in that Member State, prior to the
publication of a securities prospectus in relation to the Shares
which has been approved by the competent authority in that Member
State, or, where appropriate, approved in another Member State and
notified to the competent authority in that Member State, all in
accordance with the Prospectus Regulation, except that offers of
Shares may be made in that Member State at any time under an
exemption from the securities prospectus requirement available
under the Prospectus Regulation.
2.15 Investment
Company Act. Neither the Company nor any of its Subsidiaries
is an investment company within the meaning of the Investment
Company Act of 1940, as amended, or, directly or indirectly,
controlled by or acting on behalf of any Person which is an
investment company, within the meaning of such act.
2.16 No
Default of Violation. The Company is not in violation or
default of any provision of its Certificate of Incorporation, as
amended (the “Charter”), or its
By-Laws, as amended and restated (the “Bylaws”). The execution,
delivery, and performance of this Agreement, the Warrants and the
Registration Rights Agreement by the Company and the issuance and
sale of the Securities will not (i) result in any default or
violation of the Charter or Bylaws; (ii) result in any default or
violation of any agreement relating to the Indebtedness of the
Company or its Subsidiaries or under any mortgage, deed of trust,
security agreement, or lease to which the Company or its
Subsidiaries is a party or in any default or violation of any
judgment, order, or decree of any Governmental Authority; or (iii)
be in conflict with or constitute, with or without the passage of
time or giving of notice, a default under any such provision,
require any consent or waiver under any such provision, or result
in the creation of any Lien upon any of the properties or assets of
the Company or its Subsidiaries pursuant to any such provision;
except in the case of (ii) and (iii) above, as would not,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
2.17 Compliance
with Laws. Neither the Company nor any of its Subsidiaries
is in violation of any applicable federal, state, local, foreign,
or other law, statute, regulation, rule, ordinance, code,
convention, directive, order, judgment, or other legal requirement
(collectively, “Laws”) of any
Governmental Authority, except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material
Adverse Effect. To the Knowledge of the Company, neither the
Company nor any of its Subsidiaries is being investigated with
respect to, or been overtly threatened to be charged with or given
notice of any violation of, any applicable Law, except as would
not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
2.18 No
Company Material Adverse Effect. Since June 30, 2020, no
event or circumstance has occurred that, individually or in the
aggregate, has had or would reasonably be expected to have a
Company Material Adverse Effect.
2.19 No
Restricted Payments. No Subsidiary of the Company is
currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on
such Subsidiary’s capital stock, from repaying to the Company
any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary’s property or assets to
the Company or any other Subsidiary of the Company.
2.20 No
Price Stabilization or Manipulation. The Company has not
taken, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result
in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
2.21 FCPA.
Neither the Company nor any of its Subsidiaries nor any director,
officer or controlled Affiliate of the Company or any of its
Subsidiaries nor, to the Knowledge of the Company, any agent or
employee of the Company or any of its Subsidiaries nor, to the
Knowledge of the Company, any Affiliate of the Company or any of
its Subsidiaries that is not controlled by or under common control
with the Company or any of its Subsidiaries, is aware of, has taken
or will take any action, directly or indirectly, that would result
in a violation by such Persons of the Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder (the
“FCPA”), including,
without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of
an offer, payment, promise to pay or authorization of the payment
of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the
FCPA; and the Company, its Subsidiaries and its controlled
Affiliates have conducted their businesses in compliance with the
FCPA and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith and with the
representation and warranty contained herein.
2.22 Compliance
with Money Laundering Laws. The operations of the Company
and its Subsidiaries are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting
requirements and the money laundering statutes and the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any of its Subsidiaries with respect to the Money
Laundering Laws is pending or, to the Knowledge of the Company,
threatened.
2.23 OFAC.
Neither the Company nor any of its Subsidiaries nor any director,
officer, agent, employee or Affiliate of the Company or any of its
Subsidiaries (i) is currently subject to any sanctions administered
imposed by the United States (including any administered or
enforced by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”) or (ii) will,
directly or indirectly, use the proceeds from the issuance of the
Securities, or lend, contribute or otherwise make available such
proceeds to any Subsidiary, joint venture partner or other Person
in any manner that will result in a violation of any economic
sanctions imposed by the United States (including any administered
or enforced by OFAC, the U.S. Department of State, or the Bureau of
Industry and Security of the U.S. Department of Commerce), the
United Nations Security Council, the European Union, or the United
Kingdom (including sanctions administered or controlled by Her
Majesty’s Treasury) by, or could result in the imposition of
Sanctions against, any Person (including any Person participating
in the transactions contemplated by this Agreement, whether as
placement agent, advisor, investor or otherwise).
2.24 Acquisition.
Nothing has come to the Company’s attention that has caused
it to believe that the Acquisition will not be consummated
substantially in accordance with the terms and conditions approved
by the Board of Directors of the Company.
2.25 No
Brokers’ Fees. No broker, investment banker, financial
advisor or other Person, other than KeyBanc Capital Markets Inc.
(“KBCM”), the fees of which
will be paid by the Company, is entitled to any broker’s,
finder’s, financial advisor’s, or other similar fee or
commission in connection with the transactions contemplated by this
Agreement.
3. Representations and Warranties of Each
Purchaser. Each Purchaser represents and warrants, severally
and not jointly, to the Company as of the date hereof and as of the
Closing Date that:
3.1 Private Placement.
(a) The Securities to
be acquired by such Purchaser hereunder will be acquired for such
Purchaser’s own account and not with a view to the resale or
distribution of any part thereof. Such Purchaser is aware that (i)
the offer and sale of the Securities to it have not been, and,
except as contemplated by the Registration Rights Agreement, will
not be, registered under the Securities Act or any state securities
Laws and are being offered and sold in reliance upon exemptions
from the registration requirements of the Securities Act and (ii)
the Securities purchased hereunder may not be transferred or resold
except as permitted under the Securities Act and applicable state
securities Laws pursuant to registration or exemption from
registration requirements thereunder; provided, however, that by making such
representations herein, such Purchaser does not agree to hold any
of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an
exemption under the Securities Act. Further, such Purchaser is
aware and agrees that the offer and sale of the Shares to it do not
require the publication of a securities prospectus under the
Prospectus Regulation and that such securities prospectus has not
been, and will not be, filed for approval with the competent
authority nor published in any Member State and are being offered
and sold in reliance upon exemptions from the securities prospectus
requirements under the Prospectus Regulation.
(b) Each of the
Purchasers listed on Schedule 1 attached hereto is
an “accredited investor” within the meaning of Rule 501
of Regulation D promulgated under the Securities Act.
(c) Each of the
Purchasers listed on Schedule 2 attached hereto has
received and reviewed the SEC Reports listed on Schedule 3 attached
hereto.
(d) Such Purchaser
understands that, unless sold pursuant to a registration statement
that has been declared effective under the Securities Act or in
compliance with Rule 144 thereunder, the certificates evidencing
the Securities will bear a legend or other restriction
substantially to the following effect (it being agreed that if the
Shares or Warrant Shares are not certificated, other appropriate
restrictions shall be implemented or notated to give effect to the
following):
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE AND WERE
OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE SECURITIES MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
AND OTHER APPLICABLE LAWS PURSUANT TO REGISTRATION OR EXEMPTION
FROM REGISTRATION REQUIREMENTS THEREUNDER.”
(e) Such Purchaser (i)
has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its
prospective investment in the Securities; and (ii) has the ability
to bear the economic risks of its prospective investment and can
afford the complete loss of such investment.
(f) Such Purchaser (i)
has conducted its own investigation of the Company and the
Securities; (ii) has had access to the Company’s public
filings with the SEC and to such financial and other information as
it deems necessary in connection with its decision to purchase the
Securities; and (iii) has been offered the opportunity to conduct
such review and analysis of the business, assets, condition,
operations, and prospects of the Company and its Subsidiaries and
to ask questions of the Company and received answers thereto, each
as it deems necessary in connection with its decision to purchase
the Shares. Each Purchaser further acknowledges that it has had the
opportunity to consult with its own counsel, financial, tax, and
other professional advisers as it believes is sufficient for
purposes of its purchase of the Securities. The foregoing, however,
does not limit or modify the representations and warranties of the
Company in Section
2 hereof or the right of each Purchaser to rely
thereon.
(g) Such Purchaser
understands that the Company will rely upon the truth and accuracy
of the foregoing representations, acknowledgements, and
agreements.
(h) Except for the
representations and warranties contained in Section 2 hereof, each
Purchaser acknowledges that neither the Company nor any Person on
behalf of the Company makes, and such Purchaser has not relied
upon, any other express or implied representation or warranty with
respect to the Company or any of its Subsidiaries or with respect
to any other information provided to such Purchaser in connection
with the transactions contemplated by this Agreement.
3.2 Organization and Good Standing.
Such Purchaser is duly incorporated or organized (as applicable),
validly existing, and in good standing under the Laws of the state
of its incorporation or organization (as applicable).
3.3 Authorization; Enforceability.
Such Purchaser has all necessary power and authority to execute,
deliver, and perform under this Agreement, the Warrants and the
Registration Rights Agreement. All action by and on behalf of such
Purchaser necessary for the authorization, execution, and delivery
of this Agreement, the Warrants and the Registration Rights
Agreement and the performance of all obligations of such Purchaser
hereunder and thereunder has been taken. This Agreement, the
Warrants and the Registration Rights Agreement, when executed and
delivered by such Purchaser, assuming due authorization, execution
and delivery by the Company, constitutes and will constitute a
valid and legally binding obligation of such Purchaser, enforceable
against such Purchaser in accordance with their respective terms,
subject to the Enforceability Exceptions.
3.4 Financial Capability. Such
Purchaser currently has, or at Closing will have, available funds
necessary to purchase the Securities at Closing on the terms and
conditions contemplated by this Agreement.
4. Covenants. The Company and each
Purchaser hereby covenant and agree, for the benefit of each other,
as follows:
4.1 Negative Covenants Prior to
Closing. From the date of this Agreement through the
Closing, the Company shall not:
(a) declare, or make
payment in respect of, any dividend or other distribution upon any
shares of capital stock of the Company;
(b) redeem, repurchase
or acquire any capital stock of the Company or any of its
Subsidiaries;
(c) amend the
Company’s Charter or Bylaws; or
(d) authorize, issue,
or reclassify any capital stock, or debt securities convertible
into capital stock, of the Company (other than the authorization
and issuance of the Shares, in accordance with this
Agreement).
4.2 State Securities Laws. The
Company shall use all commercially reasonable efforts to (i) obtain
all necessary permits and qualifications, if any, or secure an
exemption therefrom, required by any state in the United States of
America prior to the offer and sale of the Securities and (ii)
cause such authorization, approval, permit or qualification to be
effective as of the Closing.
4.3 Securities Law Disclosure;
Publicity. No public release or announcement concerning this
Agreement or the transactions contemplated hereby shall be issued
by the Company or any Purchaser without the prior consent of the
Company (in the case of a release or announcement by a Purchaser)
or the Purchasers (in the case of a release or announcement by the
Company) (which consents shall not be unreasonably withheld,
conditioned, or delayed), except for any such release or
announcement as may be required by Law or the applicable rules or
regulations of any securities exchange or securities market, in
which case the Company or the Purchasers, as the case may be, shall
allow the Purchasers or the Company, as applicable, to the extent
reasonably practicable under the circumstances, reasonable time to
comment on such release or announcement in advance of such
issuance.
4.4 Further Assurances. Each party
agrees to take, or cause to be taken, all actions, and to do, or
cause to be done, all things reasonably necessary, proper, or
advisable to obtain satisfaction of the conditions precedent to the
other parties to the consummation of the transactions contemplated
by this Agreement.
5. Conditions to Each Purchaser’s
Obligations at Closing. The several obligations of each
Purchaser to purchase the Securities from the Company and
to consummate the transactions contemplated by this Agreement are
subject to the fulfillment on or before the Closing of each of the
following conditions; provided, that each Purchaser shall
only be entitled to waive conditions with respect to such
Purchaser’s obligations:
5.1 Representations and Warranties.
The representations and warranties of the Company contained in
Section 2 hereof
shall be true and correct on and as of the Closing Date as if such
representations and warranties were made as of such date, except
for such representations and warranties made as of a specific date,
which shall be true and correct only as of such date, and in each
case, except where the failure of such representations and
warranties to be so true and correct (without giving effect to any
qualification and limitation as to “materiality” or
“material adverse effect” set forth therein) would not,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
5.2 Performance. The Company shall
have performed and complied in all material respects with all
agreements, obligations, and conditions contained in this Agreement
that are required to be performed or complied with by it on or
before the Closing.
5.3 Compliance Certificate. The
Chief Executive Officer or Chief Financial Officer of the Company
shall deliver to such Purchaser at the Closing a certificate
stating that the conditions specified in Section 5.1 and Section 5.2 hereof have been
fulfilled.
5.4 Consummation of Acquisition.
The Acquisition shall be consummated contemporaneously with the
Closing.
5.5 Registration Rights Agreement.
The Company and such Purchaser shall have entered into the
Registration Rights Agreement.
5.6 No Legal Restraint. No Law,
judgment, injunction, order, ruling, or decree shall have been
enacted, promulgated, entered, or enforced by Governmental
Authority which would prohibit the consummation of the transactions
contemplated by this Agreement, and there shall be no legal
proceeding or action pending or threatened by any Governmental
Authority that seeks to enact, issue, promulgate, enforce, or enter
into any such Law, judgment, injunction, order, ruling, or decree
or that seeks to enjoin or prohibit the consummation of the
transactions contemplated hereby.
5.7
Opinion of Company’s Counsel. Each Purchaser shall have
received an opinion from Reitler Kailas & Rosenblatt, counsel
for the Company, dated the Closing Date, in form and substance
reasonably acceptable to such Purchaser and customary for
transactions of this nature.
6. Conditions of the Company’s
Obligations at Closing. The obligations of the Company to
sell the Securities
to the several Purchasers and to consummate the transactions
contemplated by this Agreement are subject to the fulfillment on or
before the Closing of each of the following
conditions:
6.1 Representations and Warranties.
The representations and warranties of such Purchaser contained in
Section 3 hereof
shall be true and correct on and as of the Closing Date as if such
representations and warranties were made as of such date, except
for such representations and warranties made as of a specific date,
which shall be true and correct only as of such date, and in each
case, except where the failure of such representations and
warranties to be so true and correct (without giving effect to any
qualification and limitation as to “materiality” or
“material adverse effect” set forth therein) would not,
individually or in the aggregate, reasonably be expected to prevent
or materially impair or materially delay the ability of such
Purchaser to consummate the transactions contemplated by this
Agreement.
6.2 Performance. Such Purchaser
shall have performed and complied in all material respects with all
agreements, obligations, and conditions contained in this Agreement
that are required to be performed or complied with by them on or
before the Closing.
6.3 Compliance Certificate. An
authorized officer of such Purchaser shall deliver to the Company
at the Closing a certificate stating that the conditions specified
in Section 6.1 and
Section 6.2 hereof
have been fulfilled.
6.4 Registration Rights Agreement.
The Company and each Purchaser shall have entered into the
Registration Rights Agreement.
6.5 No Legal Restraint. No Law,
judgment, injunction, order, ruling, or decree shall have been
enacted, promulgated, entered, or enforced by any Governmental
Authority which would prohibit the consummation of the transactions
contemplated by this Agreement, and there shall be no legal
proceeding or action pending or threatened by any Governmental
Authority that seeks to enact, issue, promulgate, enforce, or enter
into any such Law, judgment, injunction, order, ruling, or decree
or that seeks to enjoin or prohibit the consummation of the
transactions contemplated hereby.
6.6 Consummation of Acquisition.
The Acquisition shall be consummated contemporaneously with the
Closing.
7. Termination.
7.1 Termination of Agreement Prior to
Closing. This Agreement may be terminated at any time prior
to the Closing:
(a) with respect to any
Purchaser, by the mutual written consent of such Purchaser and the
Company;
(b) by any Purchaser
(with respect to the obligations of such Purchaser) or the Company,
upon written notice to the other party, if the Closing shall not
have occurred on or prior to the date that is five (5) business
days following the date of this Agreement; provided, however, that the right to terminate
this Agreement under this Section 7.1(b) shall not be
available to any party whose breach of any provision of this
Agreement shall have been the cause of, or shall have resulted in,
the failure of the Closing to occur on or prior to such date or the
failure of a condition in Section 5 or Section 6 hereof to be
satisfied at such time;
(c) by any Purchaser
(with respect to the obligations of such Purchaser) or the Company,
upon written notice to the other party, in the event that a
Governmental Authority has issued an order, decree, or ruling or
taken any other action permanently restraining, enjoining, or
otherwise prohibiting the consummation of the transactions
contemplated by this Agreement and such order, decree, ruling, or
other action has become final and nonappealable; provided, however, that the right to terminate
this Agreement under this Section 7.1(c) shall not be
available to any party whose breach of any provision of this
Agreement shall have been the cause of, or shall have resulted in,
such order, decree, ruling, or other action;
(d) by any Purchaser
(with respect to the obligations of such Purchaser), upon written
notice to the Company, if (i) there has been a breach of any
representation, warranty, covenant, or agreement made by the
Company in this Agreement, such that the conditions to Closing set
forth in Section
5.1 and Section
5.2 hereof, as applicable, would not be satisfied; and (ii)
such breach is not cured (if curable) within ten days after
delivery of such notice; provided that this Section 7.1(d) shall only apply
if such Purchaser is not in material breach of any of its
obligations under this Agreement; or
(e) by the Company,
upon written notice to any Purchaser, if (i) there has been a
breach of any representation, warranty, covenant, or agreement made
by such Purchaser in this Agreement, such that the conditions to
Closing set forth in Section 6.1 and Section 6.2 hereof, as
applicable, would not be satisfied and (ii) such breach is not
cured (if curable) within ten days after delivery of such notice;
provided that this
Section 7.1(e)
shall only apply if the Company is not in material breach of any of
its obligations under this Agreement.
7.2 Effect of Termination Prior to
Closing. In the event of termination of this Agreement as
provided in Section
7.1 hereof, this Agreement shall become void and have no
effect without any liability or obligation on the part of any party
hereto as to which such termination has been duly effected (other
than the provisions of Section 4.3, Section 8 and Section 9 hereof and this
Section 7.2);
provided, however, that nothing herein shall
relieve any party from any liability for any breach by such party
of its representations, warranties, covenants, or agreements set
forth in this Agreement prior to such termination.
8. Indemnification.
(a) Indemnification by the Company.
The Company agrees to indemnify the Purchasers and their
Representatives (collectively, “Purchaser Related
Parties”) from, and hold each of them harmless
against, any and all actions, suits, proceedings (including any
investigations, litigation or inquiries), demands, and causes of
action, and, in connection therewith, and promptly upon demand, pay
or reimburse each of them for all costs, losses, liabilities,
damages, or expenses of any kind or nature whatsoever, including,
without limitation, the reasonable fees and disbursements of
counsel and all other reasonable expenses (collectively,
“Losses”) incurred in
connection with investigating, defending or preparing to defend any
such matter that may be incurred by them or asserted against or
involve any of them as a result of, arising out of, or in any way
related to the breach of any of the representations, warranties or
covenants of the Company contained herein, provided that such claim
for indemnification relating to a breach of the representations or
warranties is made prior to the expiration of such representations
or warranties.
(b) Indemnification by the
Purchasers. Each Purchaser severally agrees to indemnify the
Company and its Representatives (collectively, “Company Related Parties”)
from, and hold each of them harmless against, any and all actions,
suits, proceedings (including any investigations, litigation or
inquiries), demands, and causes of action, and, in connection
therewith, and promptly upon demand, pay or reimburse each of them
for all Losses incurred in connection with investigating, defending
or preparing to defend any such matter that may be incurred by them
or asserted against or involve any of them as a result of, arising
out of, or in any way related to the breach of any of the
representations, warranties or covenants of such Purchaser
contained herein, provided that such claim for indemnification
relating to a breach of the representations and warranties is made
prior to the expiration of such representations and warranties.
Notwithstanding anything herein to the contrary, (i) no Purchaser
shall be liable for the acts, omission or breaches of any other
Purchaser under or with respect to this Agreement or the
transactions contemplated hereby, and (ii) each Purchaser’s
aggregate liability for Losses under this Section 8(b) shall not exceed
the aggregate purchase price payable by such Purchaser to the
Company for it Securities under this Agreement, except in the case
of fraud or willful misconduct by such Purchaser.
(c) Indemnification Procedure.
Promptly after any Company Related Party or Purchaser Related Party
(hereinafter, the “Indemnified Party”) has
received notice of any indemnifiable claim hereunder, or the
commencement of any action, suit or proceeding by a third Person,
which the Indemnified Party believes in good faith is an
indemnifiable claim under this Agreement, the Indemnified Party
shall give the indemnitor hereunder (the “Indemnifying Party”)
written notice of such claim or the commencement of such action,
suit or proceeding, but failure to so notify the Indemnifying Party
will not relieve the Indemnifying Party from any liability it may
have to such Indemnified Party hereunder except to the extent that
the Indemnifying Party is materially prejudiced by such failure.
Such notice shall state the nature and the basis of such claim to
the extent then known. The Indemnifying Party shall have the right
to defend and settle, at its own expense and by its own counsel who
shall be reasonably acceptable to the Indemnified Party, any such
matter as long as the Indemnifying Party pursues the same
diligently and in good faith. If the Indemnifying Party undertakes
to defend or settle, it shall promptly notify the Indemnified Party
of its intention to do so, and the Indemnified Party shall
cooperate with the Indemnifying Party and its counsel in all
commercially reasonable respects in the defense thereof and the
settlement thereof. Such cooperation shall include, but shall not
be limited to, furnishing the Indemnifying Party with any books,
records and other information reasonably requested by the
Indemnifying Party and in the Indemnified Party’s possession
or control. Such cooperation of the Indemnified Party shall be at
the cost of the Indemnifying Party. After the Indemnifying Party
has notified the Indemnified Party of its intention to undertake to
defend or settle any such asserted liability, and for so long as
the Indemnifying Party diligently pursues such defense, the
Indemnifying Party shall not be liable for any additional legal
expenses incurred by the Indemnified Party in connection with any
defense or settlement of such asserted liability; provided,
however, that the Indemnified Party shall be entitled (a) at its
expense, to participate in the defense of such asserted liability
and the negotiations of the settlement thereof and (b) if (i) the
Indemnifying Party has failed to assume the defense or employ
counsel reasonably acceptable to the Indemnified Party or (ii) if
the defendants in any such action include both the Indemnified
Party and the Indemnifying Party and counsel to the Indemnified
Party shall have concluded that there may be reasonable defenses
available to the Indemnified Party that are different from or in
addition to those available to the Indemnifying Party or if the
interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, then the
Indemnified Party shall have the right to select a separate counsel
and to assume such legal defense and otherwise to participate in
the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation
to be reimbursed by the Indemnifying Party as incurred.
Notwithstanding any other provision of this Agreement, the
Indemnifying Party shall not settle any indemnified claim without
the consent of the Indemnified Party, unless the settlement thereof
imposes no liability or obligation on, and includes a complete
release from liability of, and does not include any admission of
wrongdoing or malfeasance by, the Indemnified Party.
9. Miscellaneous.
9.1 Survival. The representations,
warranties, covenants, and agreements contained in this Agreement
shall survive the Closing for a period of one year after the date
hereof and thereafter shall have no further force and
effect.
9.2 Successors and Assigns. The
provisions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and permitted assigns of the
parties hereto. The Company will not assign this Agreement or any
rights or obligations hereunder without the prior written consent
of the Purchasers. None of the Purchasers will assign this
Agreement or any rights or obligations hereunder without the prior
written consent of the Company, except to a Permitted Transferee as
provided in the next sentence. Notwithstanding anything to the
contrary contained herein, each of the Purchasers may assign its
commitment to purchase the Securities hereunder in whole or in part
to any direct or indirect subsidiary of such Purchaser or any of
its Affiliates and its Affiliates’ limited partners and/or
funds, entities and accounts managed or advised by its Affiliates
(any such transferee, a “Permitted Transferee”)
subject to such Permitted Transferee making the representations and
warranties set forth in Section 3, and each such
Permitted Transferee shall be entitled to the full benefit and be
subject to the obligations of this Agreement as if such Person were
a “Purchaser” hereunder.
9.3 Notices. Any notice or request
required or permitted to be delivered under this Agreement shall be
given in writing and shall be deemed effectively given (a) if given
by personal delivery, upon actual delivery; (b) if given by
facsimile or electronic mail, upon receipt of confirmation of a
completed transmittal or receipt, as applicable; (c) if given by
mail, upon the earlier of (i) actual receipt of such notice by the
intended recipient; or (ii) three business days after such notice
is deposited in first class mail, postage prepaid; and (d) if by an
internationally recognized overnight courier, one business day
after delivery to such courier for overnight delivery. All notices
to the Company shall be addressed to the address below and all
notices to any Purchaser shall be addressed to the address listed
on such Purchaser’s signature page hereto, or at such other
address as the parties hereto may designate by ten days’
advance written notice to the other parties:
If the Company:
Scientific
Industries, Inc.
80
Orville Drive, Suite 102
Bohemia,
NY 11716
Attention:
Helena SantosEmail: hsantos@scientificindustries.com
With a copy to (which shall not
constitute notice to the Company):
Reitler
Kailas & Rosenblatt LLC
885
3rd Ave,
20th
Floor
New
York, NY 10022
Attention:
John F.F. Watkins, Esq.
Email:
jwatkins@reitlerlaw.com
Facsimile:
(212) 371-5500
If to a Purchaser:
[See signature pages
hereto]
9.4 Governing Law. This Agreement
shall be governed in all respects by the Laws of the State of New
York without regard to choice of Law or principles that could
require the application of the Laws of any other
jurisdiction.
9.5 Submission to Jurisdiction; Venue;
Waiver of Trial by Jury. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York over any suit,
action, or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby. Each of the parties
irrevocably waives, to the fullest extent permitted by Law, any
objection which it may now or hereafter have to the laying of venue
of any such suit, action, or proceeding brought in such a court
pursuant to the foregoing sentence and any claim that any such
suit, action, or proceeding brought in such a court has been
brought in an inconvenient forum. EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS
LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE,
EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT, OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER;
(III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY; AND (IV) EACH PARTY
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH IN THIS
SECTION
9.5.
9.6 Equitable Relief. The parties
hereto agree that irreparable damage would occur in the event that
any provision of this Agreement was not performed in accordance
with its specific terms or was otherwise breached. It is
accordingly agreed that the parties hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions hereof in any
court of competent jurisdiction, this being in addition to any
other remedy to which they are entitled at Law or in equity.
Additionally, each party hereto irrevocably waives any defense
based on adequacy of any other remedy, whether at Law or in equity,
that might be asserted as a bar to the remedy of specific
performance of any of the terms or provisions hereof or injunctive
relief in any action brought therefor.
9.7 Severability. If any provision
of this Agreement or the application of any such provision to any
Person or circumstance shall be declared by any court of competent
jurisdiction to be invalid, illegal, void, or unenforceable in any
respect, all other provisions of this Agreement, or the application
of such provision to Persons or circumstances other than those as
to which it has been held invalid, illegal, void, or unenforceable,
shall nevertheless remain in full force and effect and will in no
way be affected, impaired, or invalidated thereby. Upon such
determination that any provision, or the application of any such
provision, is invalid, illegal, void, or unenforceable, the parties
hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties hereto as closely as
possible to the fullest extent permitted by Law in an acceptable
manner to the end that the transactions contemplated hereby are
fulfilled to the greatest extent possible.
9.8 Entire Agreement. This
Agreement, including the Annexes, Exhibits and Schedules hereto,
constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior
written, and prior and contemporaneous oral, agreements and
understandings between the parties with respect to the subject
matter hereof.
9.9 No Third Party Beneficiaries.
Nothing in this Agreement (implied or otherwise) is intended to
confer upon any Person other than the parties hereto, or their
respective successors and permitted assigns, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement,
except that KBCM is an intended third party beneficiary of the
representations and warranties made by (i) the Company in Section 2
and (ii) the Purchasers in Section 3 and the covenants of the
parties set forth in Section 4.
9.10 Headings;
Interpretation. All headings and subheadings used in this
Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement. The words
“include,” “includes,” and
“including” will be deemed to be followed by the phrase
“without limitation.” The meanings given to terms
defined herein will be equally applicable to both the singular and
plural forms of such terms. Unless expressly provided to the
contrary, the word “or” is not exclusive and
“hereunder,” “hereof,” “herein”
and words of similar import are references to this Agreement as a
whole and not any particular section or other provision of this
Agreement. Whenever the context may require, any pronoun includes
the corresponding masculine, feminine, and neuter forms. All
references to “dollars” or “$” will be
deemed references to the lawful money of the United States of
America. Further, the parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties
hereto, and no presumption or burden of proof shall arise favoring
or disfavoring any party hereto by virtue of the authorship of any
provisions of this Agreement. All annexes attached hereto are
hereby incorporated herein by reference and made a part
hereof.
9.11 Expenses.
Each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance
of this Agreement. The Company shall pay all Transfer Agent fees
(including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company and
any exercise notice delivered by a Purchaser), stamp taxes and
other taxes and duties levied in connection with the delivery of
the Securities to the
Purchasers.
9.12 Amendments
and Waivers. No term of this Agreement may be amended or
modified without the prior written consent of each party hereto and
this Agreement may not be amended in a manner that provides more
favorable terms to any Purchaser unless the other Purchasers are
first offered the opportunity to accept such favorable terms. No
provision of this Agreement may be waived except in a writing
executed and delivered by the party against whom such waiver is
sought to be enforced.
9.13 Certain
Definitions. The following terms shall have the respective
meanings for all purposes of the Agreement:
(a) “Affiliate” of any Person
shall mean any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such
Person. For purposes of this definition, “control” when
used with respect to any Person has the meaning specified in Rule
12b-2 promulgated under the Exchange Act; and the terms
“controlling” and “controlled” have
meanings correlative to the foregoing.
(b) “Company Material Adverse
Effect” shall mean any change, development,
occurrence, or event that would reasonably be expected to be
materially adverse to (i) the business, prospects, properties,
assets, liabilities, consolidated results of operations, or
financial condition of the Company and its Subsidiaries, taken as a
whole; or (ii) the ability of the Company to consummate the
transactions contemplated hereby; provided that any such change,
development, occurrence, or event resulting or arising from or
relating to any of the following matters shall not be considered
when determining whether a Company Material Adverse Effect has
occurred or would reasonably be expected to occur: (1) any change,
development, occurrence, or event affecting the businesses or
industries in which the Company and its Subsidiaries operate; (2)
any conditions affecting the United States of America’s
general economy or the general economy in any geographic area in
which the Company or its Subsidiaries operate or developments or
changes therein or the financial and securities markets and credit
markets in the United States of America or elsewhere in the world;
(3) political conditions, including acts of war (whether or not
declared), armed hostilities, and terrorism, or developments or
changes therein; (4) any conditions resulting from natural
disasters; (5) changes in any Laws or GAAP; (6) any action taken or
omitted to be taken by or at the written request or with the
written consent of any Purchaser; (7) any announcement or pendency
of this Agreement or the transactions contemplated hereby; (8)
changes in the market price or trading volume of Common Stock or
any other equity, equity-related, or debt securities of the Company
or its Affiliates (it being understood that the underlying
circumstances, events, or reasons giving rise to any such change
can be taken into account in determining whether a Company Material
Adverse Effect has occurred or would reasonably be expected to
occur); (9) any failure by the Company or its Subsidiaries to meet
any internal or public projections, forecasts, estimates, or
guidance for any period (it being understood that the underlying
circumstances, events, or reasons giving rise to any such failure
can be taken into account in determining whether a Company Material
Adverse Effect has occurred or would reasonably be expected to
occur); or (10) any legal claims or other proceedings made by any
of the Company’s stockholders (on their own behalf or on
behalf of the Company) arising out of or related to this Agreement;
provided, however, that the changes,
developments, occurrences, or events set forth in clauses (1), (2),
(3), (4), and (5) above may be taken into account in determining
whether there has been or is a Company Material Adverse Effect if
and only to the extent such changes, developments, occurrences, or
events have a disproportionate impact on the Company and its
Subsidiaries, taken as a whole, relative to other laboratory
equipment and bioprocessing companies in the United States of
America.
(c) “Governmental
Authority” shall mean any foreign governmental
authority, the United States of America, any state of the United
States of America, and any political subdivision of any of the
foregoing, and any agency, instrumentality, department, commission,
board, bureau, central bank, authority, court, or other tribunal,
having jurisdiction over any Purchaser, the Company, any of the
Company’s Subsidiaries, or their respective
properties.
(d) “Indebtedness” shall mean,
as to any Person, without duplication: (i) all indebtedness
(including principal, interest, fees, and charges) of such Person
for borrowed money or for the deferred purchase price of property
or services; (ii) any other indebtedness which is evidenced by a
promissory note, bond, debenture, or similar instrument; and (iii)
any obligation under or in respect of outstanding letters of
credit, acceptances, and similar obligations created for the
account of such Person.
(e) “Knowledge” of the Company
shall mean the actual knowledge of any of the following
individuals: John Moore, Chairman of the Board, Helena Santos,
President & CEO, or Robert Nichols, President.
(f) “Lien” shall mean any
mortgage, pledge, charge, encumbrance, security interest,
collateral assignment, or other lien or restriction.
(g) “Permitted Liens” shall
mean (i) Liens for taxes, assessments, or levies not yet due
(subject to applicable grace periods) or which are being contested
in good faith by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company in
accordance with GAAP; (ii) carriers’, warehousemen’s,
mechanics,’ landlords,’ vendors,’
materialmen’s, repairmen’s, sureties,’ or other
like Liens arising in the ordinary course of business and securing
amounts not yet due or which are being contested in good faith by
appropriate proceedings if, in the case of such contested Liens,
adequate reserves with respect thereto are maintained on the books
of the Company in accordance with GAAP; (iii) easements,
rights-of-way, covenants, reservations, exceptions, encroachments,
zoning, and similar restrictions and encumbrances or title defects
incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which would not,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect; (iv) contractual Liens which arise
in the ordinary course of business under operating agreements,
joint venture agreements, and other agreements which are usual and
customary in the Company’s industries and are for claims
which are not delinquent by more than 90 days or which are being
contested in good faith by appropriate action and for which
adequate reserves have been maintained in accordance with GAAP; (v)
bankers’ Liens, rights of set-off or similar rights and
remedies arising by operation of Law; and (vi) rights of lessees
and sublessees in assets leased by the Company or any Subsidiary
not prohibited elsewhere herein.
(h) “Person” shall mean any
individual, corporation, trust, unincorporated organization,
Governmental Authority, or any other form of entity.
(i) “Representative” of any
Person means the Affiliates, officers, directors, managers,
employees, agents, counsel, accountants, investment bankers and
other representatives of such Person.
(j) “Subsidiary” of any Person
shall mean any corporation, partnership, joint venture, limited
liability company, trust, or estate of which (or in which) more
than fifty percent of (i) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the board of
directors of such corporation (regardless of whether at the time
capital stock of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any
contingency); (ii) the interest in the capital or profits of such
partnership, joint venture, or limited liability company; or (iii)
the beneficial interest in such trust or estate is at the time
directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries, or by one or more
of such Person’s other Subsidiaries.
9.14 Independent
Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under this Agreement and the
Registration Rights Agreement (together, the “Transaction Documents”)
are several and not joint with the obligations of any other
Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under any
Transaction Document. The decision of each Purchaser to purchase
Securities pursuant to the Transaction Documents has been made by
such Purchaser independently of any other Purchaser and
independently of any information, materials, statements or opinions
as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or any Subsidiary which may
have been made or given by any other Purchaser or by any agent or
employee of any other Purchaser, and no Purchaser and any of its
agents or employees shall have any liability to any other Purchaser
(or any other Person) relating to or arising from any such
information, materials, statement or opinions. Nothing contained
herein or in any Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction
Documents. Each Purchaser acknowledges that no other Purchaser has
acted as agent for such Purchaser in connection with making its
investment hereunder and that no Purchaser will be acting as agent
of such Purchaser in connection with monitoring its investment in
the Securities or enforcing its rights under the Transaction
Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights, including without limitation the
rights arising out of the Transaction Documents, and it shall not
be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose. The Company acknowledges
that each of the Purchasers has been provided with the same
Transaction Documents for the purpose of closing a transaction with
multiple Purchasers and not because it was required or requested to
do so by any Purchaser. The Company’s obligations to each
Purchaser under this Agreement are identical to its obligations to
each other Purchaser other than such differences resulting solely
from the number of Shares purchased by such Purchaser, but
regardless of whether such obligations are memorialized herein or
in another agreement between the Company and a
Purchaser.
9.15 Counterparts.
This Agreement may be executed in any number of counterparts and
signatures may be delivered by facsimile or in electronic format
(e.g., “PDF”), each of which may be executed by less
than all parties hereto, each of which shall be enforceable against
the parties hereto actually executing such counterparts, and all of
which together shall constitute one instrument.
[Signature
Pages Follow]
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound
by the terms hereof, have caused this Agreement to be executed as
of the date first written above by their officers or other
representatives thereunto duly authorized.
|
COMPANY:
|
SCIENTIFIC INDUSTRIES, INC.
By:
___________________________
Name:
Title:
|
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound
by the terms hereof, have caused this Agreement to be executed as
of the date first written above by their officers or other
representatives thereunto duly authorized.
PURCHASERS:
Name of Purchaser:
____________________________________________________________
Signature of Authorized Signatory of Purchaser:
_____________________________________
Name of Authorized Signatory:
___________________________________________________
Title of Authorized Signatory:
____________________________________________________
Email Address of Authorized Signatory:
____________________________________________
Facsimile Number of Authorized Signatory:
_________________________________________
Address for Notice to Purchaser:
__________________________________________________
Address for Delivery of Securities to Purchaser (if not same as
address for notice):
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Subscription Amount: $_________________
Shares: _________________
Warrant Shares: __________________
EIN Number: _______________________
Schedule
2.3
SEC
Reports; Financial Statements
The
Company’s Form 10-Q for the quarter ended December 31, 2020
was accepted for filing by the SEC on February 22, 2021 but is
reflected on the SEC’s website as having been filed on
February 23, 2021:
https://www.sec.gov/Archives/edgar/data/87802/000165495421001966/0001654954-21-001966-index.htm
ANNEX A
Purchasers
and Number of Shares
|
Purchaser
Name
|
Number
of SharesPurchased at Closing
|
Number
of Shares of Common Stock Underlying Warrants Purchased at
Closing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
Schedule 1
Accredited Investors
Veradace
Partners L.P.
Roy
Eddleman
Pinnacle
Family Office Investments, L.P.
Punch
Nano Cap Partners I, LLC
Science
Holding GmbH
Reinhard
Vogt
William
Lapp
John
Moore
James
Buchanan Polk
Karl
Nowosielski
Robert
P. Nichols
Helena
Santos
Schedule 2
Non-accredited Investors
Daniela
Winzker-Demes
Daniel
Grünes
Dr.
Robert Huber
Konrad
Herzog
David
Frank
Kenneth
J. Kato
James
Clancy
Douglas
J. Koebler
Schedule 3
(i)
Annual Report on
Form 10-K for the fiscal year ended June 30, 2020;
(ii)
Quarterly Report on
Form 10-Q for the fiscal quarter ended December 31,
2020;
(iii)
Definitive Schedule
14A – Information Statement as of January 6,
2021;
(iv)
Reports on Form 8-K
dated March 1, 2021 and March 8, 2021, respectively;
and
(v)
Investor
Presentation
EXHIBIT A
Form of
Warrant
[See
attached]
EXHIBIT B
Form of
Registration Rights Agreement
[See
attached]
Scientific Industries Announces Acquisition of aquila biolabs to
Advance Platform for Digitally Simplified
Bioprocessing
●
Combined companies have a target market of approximately $1.2
billion annually.
●
Transforms any bench- or production-scale culture vessel into an
intelligent device via online and real-time monitoring of process
parameters to improve time-to-market.
●
Digital technology enables bioprocessing productivity
gains.
BOHEMIA, NY and PITTSBURGH, PA /April 30, 2021
/ Scientific Industries,
Inc. (OTCQB: SCND), a life sciences tool
provider, and a developer of optical sensors for non-invasive,
real-time monitoring of cell culture systems through its subsidiary
Scientific Bioprocessing, Inc. (“SBI”), today announced
its acquisition of aquila biolabs
GmbH, a privately held German
technology developer of smart sensors and state-of-the-art
data analytics software for bioprocessing applications under agreed
upon terms. The Company believes the
acquisition positions the Company to become a leading player in the
bioprocessing industry.
John Moore, SBI’s President and Chairman of Scientific
Industries, said, “The combined technologies from
these two companies will allow us to create a new digital platform
that brings dramatic innovation and significantly enhance accuracy
in and throughput to the biopharmaceutical workflow. We now have a
target cell culture and biomanufacturing market that approximates
$1.2 billion annually that has almost no digital technology to
increase productivity. The ability to precisely tune multiple
culture parameters is essential for efficient, consistent
production of high-quality therapeutics. We believe we are well
positioned to capture market share in the coming years and are
excited about the opportunities ahead.”
The synergy of technologies developed by SBI and aquila biolabs for
real-time, non-invasive cell monitoring positions the combined
organization to advance a digital, sensor-based platform to
optimize, simplify and accelerate bioprocessing
workflows.
Once developed, the platform will enable online, real-time
monitoring of bioprocessing parameters delivering insights and
actionable data needed to develop and maintain precisely defined
and tightly controlled workflows that will improve time-to-market
and digitally simplify bioprocessing. The platform will be
compatible with a broad variety of bench- and production-scale
vessels, transforming them into data factories that can fuel
state-of-the-art machine learning and AI tools.
“As SBI explored the breadth of available technologies that
could spearhead digitally simplified
bioprocessing, aquila’s
approach stood out as the most impressive one,”
said Reinhard Vogt, Chairman of SBI and former Executive
Vice President and Member of the Board of Sartorius AG. “In
addition to a strong pipeline of advanced sensors and data
analytics tools, this strategic acquisition adds new talent to our
already strong team and expands SBI’s footprint into
Europe.”
In connection with the acquisition, aquila biolabs has entered into
new contracts with its four founders and with Daniela
Winzker-Demes, industry veteran and former Vice President of Sales
EMEA at Sartorius Lab Instruments, as SBI’s Vice President of
Sales EMEA and Asia.
“We are excited to join SBI and expand the reach of our
unique platform to bioprocess scientists around the
world,” said Daniel Grünes, co-founder of aquila
biolabs who will assume the role of vice president of R&D and
Operations at SBI. “While customers
already have access to some process parameters, there are still too
many black boxes and unknowns in bioprocessing. Our platform
combined with SBI will deliver actionable insights to our customers
to help them make the right decisions.”
“The
successful acquisition of aquila biolabs is one more step in our
Company’s path to becoming a world class life sciences tool
provider and an international company,” said Helena Santos,
CEO of Scientific Industries.
KeyBanc
Capital Markets acted as financial advisor to the Company in the
acquisition of aquila biolabs. The Company financed the acquisition
of aquila biolabs through an equity private placement. KeyBanc
Capital Markets acted as sole placement agent on the
transaction.
About Scientific Bioprocessing, Inc.
SBI is dedicated to providing state-of-the-art instruments,
strategies, and technologies to expedite the production of viable
cells and therapies with a streamlined process and product
consistency. SBI’s mission is to develop sensor technologies
and instruments that make cell culture and bioprocessing work
easier, experiments more reproducible, and culture conditions
better suited to meet experimental objectives. SBI is a subsidiary
of Scientific
Industries, Inc. To learn more, visit
www.scientificbio.com.
About Scientific Industries, Inc.
Scientific Industries (OTCQB:SCND), is a life science tool
provider. It designs, manufactures, and markets laboratory
equipment, including the world-renowned
Vortex-Genie®
2 Mixer and
Torbal®
balances,
and bioprocessing systems and methods. Scientific Industries’
products are generally used and designed for research purposes in
laboratories of universities, hospitals, pharmaceutical companies,
medical device manufacturers, and pharmacies. To learn more,
visit www.scientificindustries.com.
Safe Harbor Statement
Statements
made in this press release that relate to future events,
performance or financial results of the Company are forward-looking
statements which involve uncertainties that could cause actual
events, performance or results to materially differ. The Company
undertakes no obligation to update any of these statements. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as to the date hereof. Accordingly,
any forward-looking statement should be read in conjunction with
the additional information about risks and uncertainties set forth
in the Company's Securities and Exchange Commission reports,
including our annual report on Form 10-K.
Contact:
Sandy Williams
Marketing and Product Manager
Scientific Bioprocessing, Inc.
412-230-8463
media@scientificbio.com
www.scientificbio.com
Investor Contact:
Joe Dorame
Lytham Partners, LLC
Phone: (602) 889-9700
SCND@lythampartners.com
###
Scientific Industries Announces Appointment of Dr. Jürgen
Schumacher to the Board of Directors
BOHEMIA, NY and PITTSBURGH, PA /April 30, 2021
/ Scientific Industries,
Inc. (OTCQB: SCND) today
announced the appointment of Dr. Jürgen Schumacher to the
Company’s Board of Directors.
Dr.
Jürgen Schumacher is an internationally recognized German
entrepreneur with more than 35 years of expertise in the biotech
industry. Dr. Schumacher co-founded Qiagen AG, one of
Germany’s largest biotechnology companies, NewLab Bioquality
AG, which was acquired by Charles River Laboratories International
Inc., BiBiTech and Algiax Pharmaceuticals. Dr. Schumacher advises
and invests in promising biotech business models.
Dr. Schumacher holds a PhD in Biology from Heinrich Heine
University of Düsseldorf and a Diploma in Biology from
Technical University of Darmstadt.
John Moore, Chairman of Scientific Industries and President of
Scientific Bioprocessing, Inc. (SBI), said, “We are
delighted to welcome Dr. Schumacher as director on Scientific
Industries’ Board. Jürgen has built a distinguished
career within the biotechnology industry and his extensive industry
knowledge and experience will be a real asset to the Board. We look
forward to working with him in the successful combination of aquila
biolabs and Scientific Bioprocessing to create a new digital
platform that brings dramatic innovation to bioprocessing and
significantly enhances accuracy for improved
time-to-market.”
About Scientific Bioprocessing, Inc. (SBI)
SBI is dedicated to providing state-of-the-art instruments,
strategies, and technologies to expedite the production of viable
cells and therapies with a streamlined process and product
consistency. SBI’s mission is to develop sensor technologies
and instruments that make cell culture and bioprocessing work
easier, experiments more reproducible, and culture conditions
better suited to meet experimental objectives. SBI is a subsidiary
of Scientific
Industries, Inc. To learn more, visit
www.scientificbio.com.
About Scientific Industries, Inc.
Scientific Industries (OTCQB:SCND), is a life science tool
provider. It designs, manufactures, and markets laboratory
equipment, including the world-renowned
Vortex-Genie®
2 Mixer and
Torbal®
balances,
and bioprocessing systems and methods. Scientific Industries’
products are generally used and designed for research purposes in
laboratories of universities, hospitals, pharmaceutical companies,
medical device manufacturers, and pharmacies. To learn more,
visit www.scientificindustries.com.
Safe Harbor Statement
Statements
made in this press release that relate to future events,
performance or financial results of the Company are forward-looking
statements which involve uncertainties that could cause actual
events, performance or results to materially differ. The Company
undertakes no obligation to update any of these statements. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as to the date hereof. Accordingly,
any forward-looking statement should be read in conjunction with
the additional information about risks and uncertainties set forth
in the Company's Securities and Exchange Commission reports,
including our annual report on Form 10-K.
Contact:
Sandy Williams
Marketing and Product Manager
Scientific Bioprocessing, Inc.
412-230-8463
media@scientificbio.com
www.scientificbio.com
Investor Contact:
Joe Dorame
Lytham Partners, LLC
Phone: (602) 889-9700
SCND@lythampartners.com
###
