Exhibit 99.1
Asset Purchase Agreement dated December 6, 2005 by and among Phase III Medical,
Inc., Phase III Medical Holding Company, and NeoStem, Inc.
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BY AND AMONG
PHASE III MEDICAL, INC.,
PHASE III MEDICAL HOLDING COMPANY
AND
NEOSTEM, INC.
ARTICLE I PURCHASE AND SALE, PURCHASE PRICE AND LOCK-UPS, LEGENDS ON
CERTIFICATES, ASSUMED LIABILITIES, RETAINED ASSETS, TAXES......................
1.1 Purchase and Sale of the Purchased Assets............................
1.2 Payment of the Purchase Price........................................
1.3 Assumed Liabilities..................................................
1.4 Retained Assets......................................................
1.5 Transfer Taxes
ARTICLE II DEFINITIONS; INTERPRETATION.........................................
2.1 Definitions..........................................................
2.2 Interpretation.......................................................
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER...........................
3.1 Status of Seller; Enforceability; Conflicts; Consents................
3.2 Ownership of Seller..................................................
3.3 Financial Statements.................................................
3.4 Undisclosed Liabilities..............................................
3.5 Title to Properties..................................................
3.6 Real Property........................................................
3.7 Equipment and Improvements...........................................
3.8 Contracts............................................................
3.9 Equity Interests.....................................................
3.10 Intellectual Property................................................
3.11 Required Assets; Sufficiency of Assets...............................
3.12 Personnel Identification and Compensation............................
3.13 Existing Employment Related Contracts................................
3.14 Compliance with Laws.................................................
3.15 Claims and Legal Proceedings.........................................
3.16 Employee Benefit Plans...............................................
3.17 Tax Matters..........................................................
3.18 Consents.............................................................
3.19 Licenses and Permits.................................................
3.20 Regulatory Compliance................................................
3.21 Conduct of Business Since Most Recent Balance Sheet Date.............
3.22 Broker's or Consultant's Fees........................................
3.23 Disclosure...........................................................
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER AND COMPANY.............
4.1 Status...............................................................
4.2 Authority............................................................
4.3 Due Authorization....................................................
4.4 Enforceability.......................................................
4.5 Consents.............................................................
4.6 Broker's or Consultant's Fees........................................
4.7 Capitalization.......................................................
ARTICLE V PRE-CLOSING COVENANTS................................................
5.1 Ordinary Conduct.....................................................
5.2 Right of Inspection; Access to Books and Personnel...................
5.3 Notification of Material Events......................................
5.4 Supplemental Disclosures.............................................
5.5 Exclusivity..........................................................
5.6 Publicity............................................................
5.7 Power of Attorney; Right of Endorsement, Etc.........................
5.8 Covenants Not to Compete, Solicit or Disparage.......................
5.9 Confidentiality......................................................
5.10 Certain Funds........................................................
5.11 Performance of Contracts.............................................
5.12 Employees............................................................
5.13 Assumed Contracts....................................................
5.14 Change of Corporate Name.............................................
5.15 Certain Warrants.....................................................
ARTICLE VI CONDITIONS PRECEDENT TO PURCHASER'S AND COMPANY'S OBLIGATIONS.......
6.1 Obligations to be Satisfied on or Prior to Closing Date..............
6.2 Procedure for Failure to Satisfy Conditions..........................
ARTICLE VII CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS.......................
7.1 Obligations to Be Satisfied on or Prior to Closing Date..............
7.2 Procedure for Failure to Satisfy Conditions..........................
ARTICLE VIII CLOSING...........................................................
8.1 Time and Place.......................................................
8.2 Closing Transactions.................................................
8.3 Deliveries by Seller.................................................
8.4 Deliveries by Purchaser and Company..................................
ARTICLE IX OTHER AGREEMENTS....................................................
9.1 Further Assurances...................................................
9.2 Access to Records After Closing......................................
9.3 Collection of Receivables............................................
9.4 Third Party Consents and Confidentiality Obligations.................
9.5 Registration of Shares...............................................
ARTICLE X INDEMNIFICATION......................................................
10.1 Survival of Representations, Warranties and Indemnity................
10.2 Indemnification by Seller............................................
10.3 Indemnification by Purchaser and Company.............................
10.4 Limits on Indemnification............................................
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10.5 Cross-indemnification for Broker's, Consultant's or Finder's Fees....
10.6 Procedure for Indemnification........................................
10.7 Payment..............................................................
10.8 Limited Recourse against Seller and its shareholders.................
10.9 Reduction for Insurance and Taxes....................................
10.10 Remedies Exclusive...................................................
10.11 No Consequential Damages.............................................
10.12 Escrow...............................................................
10.13 Bulk Sales...........................................................
ARTICLE XI TERMINATION.
11.1 Rights to Terminate..................................................
11.2 Effects of Termination...............................................
MISCELLANEOUS PROVISIONS.......................................................
12.1 Notices..............................................................
12.2 Assignment...........................................................
12.3 Benefit of the Agreement.............................................
12.4 Exhibits and Schedules...............................................
12.5 Headings.............................................................
12.6 Entire Agreement.....................................................
12.7 Modifications and Waivers............................................
12.8 Counterparts.........................................................
12.9 Severability.........................................................
12.10 GOVERNING LAW........................................................
12.11 Expenses.............................................................
12.12 JURISDICTION; WAIVER OF JURY TRIAL; VENUE............................
EXHIBITS
Exhibit A Escrow Agreement
SCHEDULES
Schedule 1.4 Retained Assets
Schedule 2.1 Assumed Liabilities and Assumed Contracts
Schedule 3.1 Status of Seller
Schedule 3.2 Ownership
Schedule 3.4 Undisclosed Liabilities
Schedule 3.5 Title to Properties
Schedule 3.6 Real Property
Schedule 3.8 Contracts
Schedule 3.9 Equity Interests
Schedule 3.10 Intellectual Property
Schedule 3.12 Personnel Identification and Compensation
Schedule 3.13 Existing Employment Related Contracts
Schedule 3.14 Compliance with Laws
Schedule 3.15 Litigation
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Schedule 3.16 Employee Benefit Plans
Schedule 3.18 Consents
Schedule 3.19 Licenses and Permits
Schedule 3.20 Regulatory Compliance
Schedule 3.22 Conduct of Business
Schedule 5.12 Employees
Schedule 6.1(d) Consents obtained
Schedule 6.1(j) Individuals subject to non-competition and
non-solicitation agreements
Schedule 6.1(k) Individuals subject to employment agreements and terms
Schedule 6.1(l) Individuals subject to confidentiality agreements
Schedule 6.1(n) Investment Representations
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement"), dated as of December
6, 2005, is entered into by and among Phase III Medical, Inc., a Delaware
corporation (the "Company"), Phase III Medical Holding Company, a Delaware
corporation and wholly-owned subsidiary of the Company ("Purchaser") and
NeoStem, Inc., a California corporation ("Seller").
RECITALS
WHEREAS, Seller is engaged in the business of adult stem cell collection
and storage (the "Business"); and
WHEREAS, Seller desires to sell substantially all of the assets relating
to the Business to Purchaser and Purchaser desires to purchase substantially all
of the assets relating to the Business from Seller, all on the terms set forth
herein; and
WHEREAS, each term defined in this Agreement shall have the meaning
ascribed to it in Article II;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Purchaser, Company and Seller
hereby agree as follows:
ARTICLE I
PURCHASE AND SALE, PURCHASE PRICE AND LOCK-UPS, ASSUMED LIABILITIES, RETAINED
ASSETS, TAXES
1.1 Purchase and Sale of the Purchased Assets. Subject to the terms and
conditions of this Agreement, at the Closing, Seller shall sell, assign, convey,
transfer and deliver to Purchaser and Purchaser shall purchase from Seller the
Purchased Assets, free and clear of all Liens, claims, options, charges,
encumbrances and restrictions of any kind, other than those Liens set forth on
Schedule 3.5 hereto.
1.2 Payment of the Purchase Price; Lock-ups; Legends on Certificates.
(a) Subject to the terms and conditions of this Agreement, including
those set forth in this Section 1.2, Purchaser shall, at the Closing, pay or
cause to be paid the purchase price (the "Purchase Price") consisting of
5,000,000 newly issued shares of Company Common Stock (the "Consideration" or
the "Shares"). At the Closing, 60% of the Shares shall be deposited with the
Escrow Agent pursuant to the terms of the Escrow Agreement and 40% of the Shares
shall be delivered to Seller, and subject to the terms and conditions of this
Agreement, including those set forth in this Section 1.2, Seller shall be
entitled to immediately distribute such 40% of the Shares to its shareholders.
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(b) None of the Shares shall be distributed by Seller to any
shareholder unless and until such shareholder agrees to be subject to the
limitations on transfer to which Seller agrees to be subject as set forth in
Section 1.2(c) below and to have the Shares bear the legends as set forth in
Section 1.2(d) below. Notwithstanding the foregoing limitations, subject to the
other provisions of this Agreement, including the Escrow Agreement, the
restrictions contained in Section 1.2(c) below will not prevent any Transfer (as
defined below) of any or all of the Shares by a shareholder, either during such
shareholder's lifetime or on such shareholder's death, by gift, will or
intestate succession, or by judicial decree, to such shareholder's "family
members" or to trusts, family limited partnerships and similar entities
primarily for the benefit of such shareholder or such shareholder's "family
members"; provided, however, that in each and any such event it shall be a
condition to the Transfer that the transferee execute an agreement stating that
the transferee is receiving and holding the Shares subject to the provisions
hereof, and other than to return the Shares to the former ownership, there shall
be no further Transfer of the Shares except in accordance with this Agreement.
For purposes of this sub-paragraph, "family member" shall mean spouse, lineal
descendants (including adopted children), stepchildren, father, mother, brother
or sister of the transferor or of the transferor's spouse. Also notwithstanding
the foregoing limitations, subject to the provisions of this Agreement,
including the Escrow Agreement, in the event such shareholder is an entity
rather than an individual, the provisions hereof will not prevent any Transfer
of any or all of the Shares to the shareholders of such entity, if it is a
corporation, to the members of such entity, if it is a limited liability
company, or to the partners in such entity, if it is a partnership; provided,
however, that in each and any such event it shall be a condition to the Transfer
that the transferee execute an agreement stating that the transferee is
receiving and holding the Shares subject to the provisions hereof, and other
than to return the Shares to the former ownership, there shall be no further
Transfer of the Shares except in accordance with this Agreement.
(c) During the Restricted Period (as defined below) Seller shall not
(i) sell or offer or contract to sell or offer, grant any option or warrant for
the sale of, assign, transfer, pledge, hypothecate, or otherwise encumber or
dispose of (all being referred to as a "Transfer") any legal or beneficial
interest in any of the Shares; or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of any of the Shares, whether
such swap transaction is to be settled by delivery of any Shares or other
securities of any person, in cash or otherwise. Notwithstanding anything to the
contrary set forth in this Agreement or the Escrow Agreement, Seller shall be
entitled to pledge (or otherwise use as collateral) the Shares in connection
with the satisfaction of any indemnification claims under this Agreement or any
third party liabilities or obligations owed by Seller, provided, however, that
(i) any Shares covered by the Escrow Agreement shall remain subject to the
Escrow Agreement for the term thereof, (ii) all Shares so pledged shall remain
subject to the restrictions on Transfer during the Restricted Period, (iii)
during the term of the Escrow Agreement, no third party shall ever have a
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priority in the Shares that is greater than Purchaser's and Company's, and (iv)
any Transfer by the pledgee(s) or any transferee(s) of such pledged Shares
during the twelve months following the Restricted Period shall comply with the
volume restrictions contained in Rule 144(e)(1) of the Securities Act.
As used herein, "Restricted Period" means the period commencing
on the Closing Date and ending on the first anniversary of the Closing Date. The
foregoing restrictions shall apply notwithstanding registration of the Shares
pursuant to the registration rights set forth in Section 9.5 hereof.
It is understood that (i) the Shares held in escrow pursuant to
the Escrow Agreement shall be subject to the foregoing restrictions; and (ii)
any of the Shares may be released in whole or in part from the terms hereof upon
the approval of the board of directors of the Company.
(d) The certificates representing the Shares delivered pursuant to this
Section 1.2, shall bear legends in substantially the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The securities
may not be sold, transferred or assigned in the absence of an effective
registration statement for the securities under said Act, or an opinion
of counsel, in form, substance and scope reasonably acceptable to the
Company, that registration is not required under said Act or unless
sold pursuant to Rule 144 under said Act."
"The securities represented by this certificate are subject to
additional restrictions on transfer to which any transferee agrees by
his acceptance hereof, as set forth in the Asset Purchase Agreement
dated as of December __, 2005. No transfer will be made on the books of
the Company unless accompanied by evidence of compliance with the terms
of such agreement and by an agreement of transferee to be bound by the
restrictions set forth in the Agreement. The Company will mail a copy
of such transfer restrictions to the holder hereof without charge after
the Company's receipt of a written request therefor."
1.3 Assumed Liabilities.
(a) Purchaser shall, at the Closing, irrevocably and absolutely,
assume, pay or otherwise discharge only the obligations and liabilities of
Seller (i) relating to the Assumed Contracts (excluding any liabilities set
forth in Section 1.3(b)); provided that any liabilities relating to the Assumed
Contracts that are outstanding as of the Closing Date must be set forth on
Schedule 2.1 hereto as liabilities to be assumed, as updated from time to time
between signing and Closing; and (ii) that are certain specified additional
liabilities of Seller (the "Assumed Additional Liabilities"). The Assumed
Contracts and the Assumed Additional Liabilities are collectively referred to
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herein as the "Assumed Liabilities" and are set forth on Schedule 2.1 hereto.
Notwithstanding the foregoing, Purchaser's obligations hereunder with respect to
amounts due and owing by Seller to certain individuals as noted on Schedule 2.1
shall be settled by the issuance by the Company to each such individual of that
number of shares of Company Common Stock equal to the quotient of the amount of
such liability divided by the Fair Market Value of one share of Company Common
Stock on the date immediately preceding the earlier of the first announcement of
the transactions contemplated by this Agreement or the Closing Date.
(b) Purchaser shall not assume or pay and Seller shall continue to
be responsible for any debt, obligation or liability, of any kind or nature
(fixed or contingent, known or unknown) of Seller whether or not relating to the
Business, not expressly assumed by Purchaser pursuant to Section 1.3(a) (the
"Excluded Liabilities"), including without limitation: (i) except and to the
extent set forth in Section 1.5 or Schedule 2.1, any liability for Taxes,
including (A) any Taxes arising as a result of Seller's ownership of the
Purchased Assets prior to the Closing Date, (B) any income Taxes that will arise
as a result of the sale of the Assets pursuant to this Agreement, (C) any
deferred Taxes of any nature, but excluding Purchaser's obligation to pay all
Transfer Taxes; (ii) except as set forth on Schedule 2.1, any liability under
any Contract that is not an Assumed Contract; (iii) except and to the extent set
forth on Schedule 2.1, any liability of Seller to any Seller shareholder or
Affiliate of Seller or any Seller shareholder; (iv) any liability to distribute
to any of Seller's shareholders, warrant holders or option holders or otherwise
apply all or any part of the Consideration received hereunder; (v) any liability
arising out of or resulting from Seller's compliance or noncompliance with any
judgment, order, award or decree of any foreign, federal, state, local or other
court or tribunal, or Authority and any award in any arbitration proceeding of
any Authority; (vi) any liability relating to the compensation arrangements set
forth in Schedules 3.12 and 3.13; and (vii) any liability of Seller based upon
Seller's acts or omissions occurring after the Closing Date.
1.4 Retained Assets. Seller shall not sell, transfer, convey or deliver to
Purchaser, and Purchaser shall not purchase from Seller the assets, properties,
interests and rights of Seller set forth on Schedule 1.4 (the "Retained
Assets").
1.5 Transfer Taxes. Purchaser shall pay all transfer, sales, purchase, use,
value added, excise or similar Tax arising out of the transfer of any of the
Purchased Assets from Seller to Purchaser.
ARTICLE II
DEFINITIONS
2.1 Definitions. As used herein, the following terms shall have the
meanings ascribed to them in this Section 2.1:
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Accounts Receivable. All present and future rights to payment for
goods or services rendered whether or not earned by performance, including,
without limitation, all accounts or notes receivable owned or held by Seller.
Affiliate. As set forth in Rule 12b-2 of the general rules and
regulations under the Securities Exchange Act of 1934, as amended.
Agreement. This Asset Purchase Agreement, together with all Exhibits
and Schedules referred to herein, as amended, modified or supplemented from time
to time in accordance with the terms hereof.
Assumed Additional Liabilities. Liabilities listed on Schedule 2.1
hereto.
Assumed Contracts. Contracts listed on Schedule 2.1.
Assumed Liabilities. The Assumed Contracts and the Assumed
Additional Liabilities.
Authority. Any governmental, regulatory or administrative body,
agency or authority, any court or judicial authority, any arbitrator or any
public, private or industry regulatory authority, whether foreign, federal,
state or local.
Business. As defined in the Recitals hereto.
Business Day. Any day other than a Saturday, Sunday or a day on
which banks in New York are not open for business.
Closing. The actual sale, conveyance, transfer, assignment and
delivery of the Purchased Assets to Purchaser.
Closing Date. The date which is the later of: (a) fifteen (15)
days following the execution of this Agreement or (b) three (3) Business
Days following the date on which all closing conditions have been satisfied or
waived, or such other date as the Parties may mutually agree in writing, and
upon which the Closing shall occur.
Code. Internal Revenue Code of 1986, as it may be amended from time
to time.
Company Common Stock. The common stock, $.001 par value of Phase III
Medical, Inc.
Consideration. As defined in Section 1.2.
Contracts. All contracts, leases, subleases, arrangements,
commitments and other agreements of Seller relating to the Business or Purchased
Assets, including, without limitation, all customer agreements, vendor
agreements, purchase orders, installation and maintenance agreements, computer
software licenses, hardware lease or rental agreements.
Employee Benefit Plan. Any employee benefit plan within the meaning
of Section 3(3) of ERISA which (a) is maintained for employees of Seller or any
of its ERISA Affiliates or (b) has at any time within the preceding six (6)
years been maintained for employees of Seller or any current or former ERISA
Affiliates, and any bonus or other incentive compensation, deferred
compensation, salary continuation, sick or disability pay, severance, stock
award, stock option, stock purchase, tuition assistance, vacation, vacation pay
or other benefit plan or arrangement, and each employment, termination or other
compensation arrangement or agreement, in each case with respect to current or
former employees or consultants of or to Seller or any ERISA Affiliate, and
under which Seller or any ERISA Affiliate could reasonably be expected to have
any liability.
Employment Agreements. As defined in Section 6.1.
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Equipment and Improvements. All facilities and structures,
buildings, installations, fixtures, improvements, betterments, additions,
laboratory equipment, spare parts, stores, supplies, fuel and lubes, machinery,
equipment, cranes, forklifts, platforms, vehicles, trucks, chassis, generators,
containers, spare tires and parts, tools, appliances, furniture, office
furniture, fixtures, office supplies and office equipment, computers, computer
terminals and printers, computer software, telephone systems, telecopiers and
photocopiers, and other tangible personal property of every kind and
description, which are owned or leased by Seller, or are utilized in connection
with Seller's operation of the Business.
ERISA. The Employee Retirement Income Security Act of 1974, as it
may be amended from time to time, and the regulations promulgated thereunder.
ERISA Affiliate. Any corporation, partnership or trade or business
which is a member of a group that includes Seller and is treated as a single
employer within the meaning of Section 414(b), (c), (m) or (o) of the Code.
Escrow Agent. As defined in Section 1.2.
Escrow Agreement. As defined in Section 10.11.
Escrow Amount. As defined in Section 10.12.
Exchange Act. The Securities Exchange Act of 1934, as amended.
Excluded Liabilities. As defined in Section 1.3.
Fair Market Value. Fair Market Value of one share of Company Common
Stock shall mean the average closing price (the "Price") of one share of Company
Common Stock on the National Association of Securities Dealers, Inc.
Over-the-Counter Bulletin Board (the "Bulletin Board") (or other similar
exchange or association on which the Company Common Stock is then listed or
quoted) for the five (5) consecutive trading days immediately preceding the date
for which such Fair Market Value is being determined. If the Company Common
Stock is not then quoted on the Bulletin Board or otherwise listed or quoted on
an exchange or association, the Price shall be the fair market value of one
share of Company Common Stock as of the date for which such Fair Market Value is
being determined as determined in good faith by the Board of Directors of the
Company.
FDA. The Federal Food and Drug Administration.
Financial Statements. The financial statements of Seller for the
fiscal years ended on December 31, 2004 , 2003, 2002, together with the notes
thereto
Food and Drug Laws. The Federal Food, Drug, and Cosmetic Act of
1938, as amended, and all similar state, local, and foreign laws or ordinances.
GAAP. Generally accepted accounting principles.
Indemnified Party. As defined in Section 10.6.
Indemnifying Party. As defined in Section 10.6.
IRS. Internal Revenue Service.
Law. Any law, statute, regulation, rule, ordinance, requirement,
announcement or other binding action or requirement of an Authority.
Leased Real Property. The parcels of land more fully described on
Schedule 3.6 under the heading "Leased Real Property," together with all rights
and privileges under such leases (hereinafter referred to collectively as the
"Real Property Leases") to the real property subject to such leases.
Legal Provisions. As defined in Section 3.1.
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Lien. Any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, capitalized lease or other title retention
agreement).
Most Recent Balance Sheet. The balance sheet of Seller dated
September 30, 2005.
Most Recent Balance Sheet Date. September 30, 2005.
Non-Competition Agreement. As defined in Section 6.3.
Order. Any decree, order, judgment, writ, award, injunction,
stipulation or consent of or by an Authority.
Ordinary Course of Business. The ordinary course of business of
Seller, in accordance with past custom and practice (including, without
limitation, with respect to quantity and frequency).
Parties. Phase III Medical, Inc., Phase III Medical Holding Company
and NeoStem, Inc. Pending Claims. As defined in Section 10.12.
Pension Plan. At any time an employee pension benefit plan that is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is maintained either: (i) by Seller or any ERISA
Affiliate or (ii) pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and, with
respect to either (i) or (ii), Seller or any ERISA Affiliate is then making or
accruing an obligation to make contributions or has within the preceding six (6)
plan years made contributions.
Permits. As defined in Section 3.19.
Person. Any natural person, corporation, limited liability company,
partnership, firm, joint venture, joint-stock company, trust, association,
unincorporated entity or organization of any kind, Authority or other entity of
any kind.
Purchase Price. As defined in Section 1.2.
Purchased Assets. The Business and all assets, rights and properties
owned by Seller on the Closing Date relating to the Business, whether or not
carried and reflected on the books of Seller (excluding the Retained Assets),
including, but not limited to, the following:
(a) all deposits (including, without limitation, deposits on capital
expenditures) and prepaid expenses under Assumed Contracts;
(b) all inventories;
(c) the Equipment and Improvements;
(d) the Real Property Leases;
(e) the Assumed Contracts and all Accounts Receivable relating
thereto;
(f) all intellectual property, including but not limited to the
following: all trade names (including the name "NeoStem" and any similar names
used by Seller), trademarks, trademark registrations, trademark applications,
service marks, service ▇▇▇▇ registrations, service ▇▇▇▇ applications; all
copyrights, copyright registrations, copyright applications; all patent rights
(including, without limitation, issued patents, applications, divisions,
continuations and continuations-in-part, reissues, patents of addition, utility
models and inventors' certificates); all licenses with respect to any of the
foregoing; all trade secrets, proprietary manufacturing information and
know-how; all inventions, inventors' notes, drawings and designs; and, all
customer and vendor lists and the goodwill associated with any of the foregoing;
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(g) any Permits and licenses of Seller to the extent any of the same
are transferable or assignable to Purchaser;
(h) choses in action, claims and causes of action or rights of
recovery or set-off of every kind and character, in each case only to the extent
related to the Purchased Assets or the Assumed Liabilities;
(i) all of Seller's files, papers, documents and records relating to
the Business, and all other miscellaneous assets of Seller relating to the
Business wherever located, including, without limitation, Seller's website,
credit, sales and accounting records, price sheets, catalogues and sales
literature, books, processes, formulae, manufacturing data, advertising
material, stationery, office supplies, forms, catalogues, manuals,
correspondence, production records, employment records and any other information
reduced to writing relating to the Business of Seller;
(j) all rights with respect to the stem cells under the customer
stem cell storage contracts identified on Schedule 2.1; and
(k) the Business of Seller as a going concern.
Anything to the contrary notwithstanding, neither the term "Purchased Assets"
nor any of the defined asset groups nominally comprising "Purchased Assets"
shall include any asset specifically referred to in Section 1.4 above; provided,
however, that for purposes of this Agreement, the term "Purchased Assets" shall
mean all of the goodwill, assets, properties and rights of every nature, kind
and description, whether tangible or intangible, real, personal or mixed,
wherever located and whether or not carried or reflected on the books and
records of the Seller, which are used in, or which were acquired in connection
with, the operation of the Business, excepting only the Retained Assets and any
of the above which relate exclusively to the Retained Assets.
Purchaser. As defined in the heading hereto.
Purchaser Losses. As defined in Section 10.2.
Real Property. The Leased Real Property.
Real Property Leases. As defined in the definition of Leased Real
Property.
Resolved Claims. As defined in Section 10.11.
Retained Assets. As defined in Section 1.4.
SEC. Securities and Exchange Commission. Securities Act. The
Securities Act of 1933, as amended. Seller. As defined in the
heading hereto.
Stem Cell Insurance. As defined in Section 6.1(q)
Subsidiary. A Subsidiary of any Person means (i) a corporation more
than 50% of the combined voting power of the outstanding stock of which is
owned, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof, or (ii) any other Person (other than a corporation) in which such
Person, or one or more other Subsidiaries of such Person or such Person and one
or more other Subsidiaries thereof, directly or indirectly, has the power to
direct the policies, management and affairs thereof.
Taxes. As defined in Section 3.17.
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Tax Return. Any return, report or similar statement required to be
filed with respect to any Taxes (including any attached schedules), including,
without limitation, any information return, claim for refund, amended return and
declaration of estimated Tax.
Third-Party Claim. As defined in Section 10.6.
Third-Party Notice. As defined in Section 10.6.
Time Covenant. As defined in Section 5.8.
Uncontested Claims. As defined in Section 10.12.
2.3 Interpretation. Unless otherwise expressly provided or unless the
context requires otherwise, (a) all references in this Agreement to Articles,
Sections, Schedules and Exhibits shall mean and refer to Articles, Sections,
Schedules and Exhibits of this Agreement; (b) all references to statutes and
related regulations shall include all amendments of the same and any successor
or replacement statutes and regulations; (c) words using the singular or plural
number also shall include the plural and singular number, respectively; (d)
references to "hereof," "herein," "hereby" and similar terms shall refer to this
entire Agreement (including the Schedules and Exhibits hereto); and (e)
references to any Person shall be deemed to mean and include the successors and
permitted assigns of such Person (or, in the case of an Authority, Persons
succeeding to the relevant functions of such Person).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser and Company to enter into and perform this
Agreement, and in consideration of the covenants of Purchaser and Company
contained herein, Seller represents and warrants to Purchaser and Company (which
representations and warranties shall survive the Closing (subject to Section
10.1) regardless of any examinations, inspections, audits and other
investigations Purchaser and Company have heretofore made, or may hereafter
make, with respect to such representations and warranties) as follows:
3.1 Status of Seller; Enforceability; Conflicts; Consents.
(a) Except as set forth on Schedule 3.1, Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California. Except as set forth on Schedule 3.1, Seller has full
corporate power and authority and possesses all governmental franchises,
licenses, permits, authorizations and approvals necessary to enable it to use
its name and to own, lease or otherwise hold its properties and assets and to
carry on its business as presently conducted, except where the failure to
possess any such franchise, license, permit, authorization or approval would not
have a material adverse effect on Seller or the Business. Seller is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership, leasing or holding of its properties
makes such qualification necessary, except where the failure to be so duly
qualified and in good standing would not have a material adverse effect on
Seller or the Business. Seller has no Subsidiaries.
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(b) Seller has the requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution
and delivery by Seller of this Agreement, and the performance by Seller of its
obligations hereunder, have been duly and validly authorized and approved by all
necessary action on the part of Seller, except as set forth on Schedule 3.18.
(c) This Agreement is binding upon, and enforceable against, Seller
in accordance with its terms subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws affecting creditors' rights generally
and by principles of equity (whether in a proceeding at law or in equity).
(d) Except as set forth on Schedule 3.1, neither the execution nor
delivery of this Agreement by Seller nor the performance by Seller of its
obligations under this Agreement will (assuming the receipt of all consents and
approvals referred to in Schedule 3.18), conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any contract,
lease, license, franchise, permit, indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which Seller is a party or is
bound or any judgment, order or decree, statute, law, ordinance, rule or
regulation applicable to Seller or the property or assets of Seller (including,
without limitation, the Purchased Assets) or the articles of incorporation or
by-laws of Seller, or any applicable Law or Order (collectively, "Legal
Provisions"), except for conflicts, breaches or defaults which would not have a
material adverse effect on Seller or the Business.
(e) No consent, approval, license, Permit, Order or authorization
of, or registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign, is required to be obtained or made by or with respect to
Seller in connection with (i) the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, or (ii) the conduct by
Seller of its business following the Closing as conducted on the date hereof
other than those that have already been obtained and (A) the consents and
approvals referred to in Schedule 3.18, (B) those that may be required solely by
reason of Purchaser's (as opposed to any other third party's) participation in
the transactions contemplated hereby, and (C) such other consents or approvals
the failure of which to obtain would not have a material adverse effect on
Purchaser or the ability of any party to consummate the transactions
contemplated hereby.
(f) Seller has delivered to Purchaser true and complete copies of
its articles of incorporation and by-laws, as amended to date.
3.2 Ownership of Seller.
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(a) Based on Seller's books and records, the sole shareholders of
Seller are the Persons set forth on Schedule 3.2 and each such shareholder is
the registered owner of the number of shares set forth opposite such Person's
name.
(b) Based on Seller's books and records, except as set forth on
Schedule 3.2, there are no outstanding warrants, options, agreements,
convertible or exchangeable securities, phantom stock, or other commitments
pursuant to which Seller is or may become obligated to issue or sell any shares
of capital stock or other securities of Seller.
3.3 Financial Statements. The Financial Statements and the financial
statements for the nine months ended September 30, 2005 have been prepared in
accordance with GAAP, consistently applied during the periods covered thereby,
fairly present in all material respects the financial condition and the results
of operations for the periods covered thereby, and are in accordance with the
books and records of Seller. Seller has provided Purchaser with the Financial
Statements and the Most Recent Balance Sheet.
3.4 Undisclosed Liabilities. On the Most Recent Balance Sheet Date, Seller
had no debts, liabilities, Liens, claims, encumbrances or other obligations of
any nature (whether accrued, absolute, contingent or otherwise) which were not
disclosed, reflected or reserved against on the Financial Statements or the Most
Recent Balance Sheet; and, except for liabilities disclosed on Schedule 3.4
which have been incurred since the Most Recent Balance Sheet Date, since the
Most Recent Balance Sheet Date Seller has not incurred any liability of any
nature (whether accrued, absolute, contingent or otherwise).
3.5 Title to Properties. Except as set forth on Schedule 3.5, Seller has
good and marketable title to all of the assets and properties reflected on the
Most Recent Balance Sheet or used in the Business constituting Purchased Assets
free and clear of all Liens of any nature, except for (a) Liens for current
taxes not yet due and payable and (b) minor Liens or other encumbrances which
will not materially impair the value or utility of any material component of the
Purchased Assets from and after the Closing or Seller's ability to consummate
the transactions contemplated herein.
3.6 Real Property. Schedule 3.6 contains accurate descriptions of each
parcel of Real Property leased or occupied by Seller. No other Real Property is
used in the Business or occupied by Seller. The Seller owns no real property.
Except as set forth on Schedule 3.6, all of the Real Property Leases are valid
and in full force and effect, and there does not exist any default or event that
with notice or lapse of time, or both, would constitute a default by Seller
under any of the Real Property Leases, and to the knowledge of Seller, there
does not exist any default or event that with notice or lapse of time, or both,
would constitute a default by any other party under any of the Real Property
Leases.
3.7 Equipment and Improvements. Except as set forth on Schedule 3.7, to
the best of Seller's knowledge, the Equipment and Improvements located on the
Real Property are in compliance with all applicable Laws and Orders, and are in
reasonable and serviceable condition and repair, normal wear and tear excepted,
except for any such non-compliance which would not have a material adverse
effect on Seller or the Business. To the best of Seller's knowledge, neither the
Real Property nor the use or occupancy thereof by Seller violates in any way any
applicable Laws, Orders, Permits, covenants, conditions and restrictions,
whether federal, state, local or, to Seller's knowledge, private, except for any
such violation which would not have a material adverse effect on Seller or the
Business.
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3.8 Contracts.
(a) Schedule 3.8 to this Agreement contains a complete list of all
material Contracts (including, without limitation, all Assumed Contracts)
entered into or agreed to by Seller or by which Seller is currently bound and
true and complete copies of such written Contracts have been provided to
Purchaser or its counsel. Identified with an asterisk on Schedule 3.8 are those
Assumed Contracts which contain a prohibition on assignment. All Assumed
Contracts are valid and binding upon Seller, and to Seller's knowledge, the
other parties thereto except as limited by bankruptcy and insolvency laws and by
other laws affecting the rights of creditors generally. Except as set forth on
Schedule 3.8, there is no default or event that with notice or lapse of time, or
both, would constitute a default by Seller under any of such Assumed Contracts,
and to the knowledge of Seller, there is no default or event that with notice or
lapse of time, or both, would constitute a default by any other party under any
of such Assumed Contracts. Except as set forth on Schedule 3.8, Seller has not
received notice that any party to any of such Assumed Contracts intends to
cancel or terminate any of such agreements or to exercise or not exercise any
options under any of such agreements.
(b) Except as set forth on Schedule 3.8, the Assumed Contracts are
adequate and appropriate for the continued conduct of the Business as conducted
in the Ordinary Course of Business.
3.9 Equity Interests. Except as set forth on Schedule 3.9, Seller does not
directly or indirectly own any capital stock of, or other equity interests in,
any corporation, partnership, joint venture or other entity.
3.10 Intellectual Property. Schedule 3.10 contains a true and complete
list and brief description of all patents, trademarks, service marks, trade
names, and copyrights (whether or not such trademarks, trade names, service
marks and copyrights are registered), and all pending applications therefor, if
any, owned by Seller or in which Seller has any rights or licenses. No other
patents, trademarks, trade names, service marks or copyrights are reasonably
necessary for the conduct of the Business in substantially the same manner as
presently operated by Seller. To Seller's knowledge, there is no infringement or
alleged infringement by any Person of any such trademark, service ▇▇▇▇, trade
name, copyright or patent. Seller has not received any notice from any Person
alleging Seller is infringing upon, and, to Seller's knowledge, Seller has not
infringed and is not now infringing on, any trademark, service ▇▇▇▇, trade name,
copyright or patent belonging to any other Person. Schedule 3.10 also contains a
true and complete list of all agreements between each employee of Seller and
Seller relating to confidential information of Seller, including but not limited
to patents, trademarks, service marks, trade names, and copyrights, and the
ownership of any intellectual property developed by such employee under the
scope of his employment.
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3.11 Required Assets; Sufficiency of Assets. Except as set forth on
Schedule 3.11, (a) there are no significant assets used or required by Seller in
the conduct of the Business as presently conducted by Seller that are not either
owned by it or licensed or leased to it and, in each case conveyed to Purchaser
under this Agreement, and (b) the Purchased Assets constitute all of the assets,
goodwill, properties and rights of every nature, kind and description, whether
tangible or intangible, real, personal or mixed, necessary to conduct the
Business in substantially the same manner as presently conducted by Seller.
3.12 Personnel Identification and Compensation. Schedule 3.12 contains a
true and complete list of the names, titles and compensation of all current
officers, directors and employees of Seller.
3.13 Existing Employment Related Contracts. Schedule 3.13 contains a list
of all written and oral (with a short description thereof) arrangements or
contracts relating to employment, compensation, bonuses, severance, pension and
other related issues and collective bargaining agreements to which Seller is a
party or by which Seller is bound. All these contracts and arrangements are in
full force and effect, and neither Seller nor, to Seller's knowledge, any other
Person is in default under any such contract or arrangement. There have been no
claims of default and there are no facts or conditions which, with the passage
of time or upon notice, will result in a default by Seller, or to the knowledge
of Seller, any other Person, under these contracts or arrangements. There is no
pending or, to Seller's knowledge, threatened labor dispute, strike, or work
stoppage affecting Seller or the Business.
3.14 Compliance with Laws. Except as set forth in Schedule 3.14, Seller
and the Purchased Assets have complied with all, and are not in violation of
any, applicable Laws, Permits and Orders (including, without limitation, any
applicable building, zoning, environmental protection, water use, Food and Drug
Laws and related regulations, occupational health and safety, employment,
disability rights or food service facilities law, ordinance, or regulation)
affecting Seller's properties, the operation of the Business, or the Purchased
Assets, except for any such non-compliance or violation which would not have a
material adverse effect on Seller or the Business. No material capital
expenditures are required for compliance with Laws by Seller in order to conduct
the Business as presently conducted by Seller.
3.15 Claims and Legal Proceedings. Except as set forth in Schedule 3.15,
there is no claim, action, suit, arbitration, criminal or civil investigation or
proceeding pending or involving or, to the knowledge of Seller, threatened
against Seller before or by any court or governmental or nongovernmental
department, commission, board, bureau, agency or instrumentality, or any other
Person, affecting Seller or the Business or that questions the validity of this
Agreement or any action taken or to be taken Seller pursuant to this Agreement
or in connection with the transactions contemplated hereby.
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3.16 Employee Benefit Plans.
(a) Schedule 3.16 contains a true and complete list of all Employee
Benefit Plans.
(b) Except as set forth on Schedule 2.1, all obligations of any
nature under any Employee Benefit Plan will constitute a Retained Liability, and
Purchaser shall have no obligation or duty with respect thereto.
3.17 Tax Matters.
(a) The term "Taxes" means all net income, capital gains, gross
income, gross receipts, sales, use, transfer, ad valorem, franchise, profits,
license, capital, withholding, payroll, employment, excise, goods and services,
severance, stamp, occupation, premium, property, assessments, or other
governmental charges of any kind whatsoever, together with any interest, fines
and any penalties, additions to tax or additional amounts incurred or accrued
under applicable federal, state, local or foreign tax law or assessed, charged
or imposed by any Authority, domestic or foreign; provided that any interest,
penalties, additions to tax or additional amounts that relate to Taxes for any
taxable period (including any portion of any taxable period ending on or before
the Closing Date) shall be deemed to be Taxes for such period, regardless of
when such items are incurred, accrued, assessed or charged. Except as set forth
on Schedule 3.17, Seller has filed within the time period for filing or any
extension granted with respect thereto, all material Tax Returns that it is
required to file and has paid any and all material Taxes it is required to pay
in connection with the taxable periods to which such Tax Returns relate. There
are (and as of immediately following the Closing there will be) no Encumbrances
on the Purchased Assets relating to or attributable to any Taxes. None of the
Purchased Assets are treated as "tax-exempt use property" within the meaning of
Section 168(h) of the Internal Revenue Code of 1986, as amended.
(b) Seller is not a foreign person within the meaning of Code
Section 1445. Neither the Code nor any other provision of Law requires Purchaser
to withhold any portion of the Purchase Price.
3.18 Consents. Except for those consents already obtained and those
disclosed on Schedule 3.18, no consent, approval, order or authorization of, or
registration, declaration or filing with, any Authority or any other Person is
required to be obtained or made by Seller in connection with the execution and
delivery of this Agreement or the performance by Seller of its obligations
hereunder.
3.19 Licenses and Permits. Except as set forth on Schedule 3.19, Seller
owns, holds or possesses all material licenses, franchises, permits, privileges,
immunities, approvals and other authorizations from an Authority that are
necessary to entitle it to own and use the Purchased Assets and conduct the
Business (collectively, the "Permits"). Complete and correct copies of all of
the Permits have been provided to Purchaser by Seller and a listing of such
Permits is set forth on Schedule 3.19. Except as set forth on Schedule 3.19, (i)
Seller has fulfilled and performed in all material respects its obligations
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under each of the Permits, and to the best of its knowledge, no event has
occurred or condition or state of facts exists which constitutes or, after
notice or lapse of time or both, would constitute a breach or default or
violation under any such Permit or which permits or, after notice or lapse of
time or both, would permit revocation or termination of any such Permit, or
which might adversely affect in any material respect the rights of Seller under
any such Permit; (ii) no notice of cancellation, of default, of violation or of
any material dispute concerning any Permit, or of any event, condition or state
of facts described in the preceding clause, has been received by, or is known
to, Seller; and (iii) each of the Permits is valid, subsisting and in full force
and effect, and may, subject to applicable law, be assigned and transferred to
Purchaser in accordance with this Agreement, and will continue in full force and
effect thereafter, in each case without the occurrence of any breach, default or
forfeiture of rights thereunder or the consent, approval or act of, or the
making of any filing with, any Authority.
3.20 Regulatory Compliance.
(a) Seller has not received any major adverse written notice within
the past two years from any Authority alleging any violation of any Legal
Provision by Seller which, individually or in the aggregate has had or would
have a material adverse effect on Seller or the Purchased Assets.
(b) Except as described in Schedule 3.20, no Permit relating to the
operation of the Business has been denied, placed on hold, withdrawn, suspended
or discontinued as a result of any action by any Authority. No proceedings
seeking the withdrawal, suspension or seizure of any Permit of Seller are
pending against Seller, nor have any such proceedings been pending at any prior
time, in each case which has had or would have a material adverse effect on
Seller or the Purchased Assets.
(e) Seller has not received any written notice within the past two
years that the FDA or any other Authority has commenced, or overtly threatened
to initiate, any action to enjoin Seller's operation of the Business.
3.21 Broker's or Consultant's Fees. Seller has not dealt with any broker,
finder or similar consultant in connection with any of the transactions
contemplated by this Agreement and no other Person is entitled to any commission
or finder's fee in connection with the sale of the Purchased Assets to
Purchaser.
3.22 Conduct of Business Since Most Recent Balance Sheet Date. Except as
set forth on Schedule 3.22, since the Most Recent Balance Sheet Date Seller's
Business has been conducted only in the ordinary course of business.
3.23 Full Disclosure. None of the representations and warranties made by
Seller in this Agreement contains any untrue statement of a material fact, or
omits to state any material fact necessary to make the statements contained in
this Agreement not misleading. There is no fact known to Seller which (so far as
Seller reasonably foresees) materially adversely affects, or in the future may
materially adversely affect, individually or in the aggregate, the Purchased
Assets or the ability of Seller to consummate the transactions contemplated
hereby that has not been set forth herein or heretofore communicated to
Purchaser in writing pursuant hereto.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND COMPANY
As an inducement to Seller to enter into and perform this Agreement, and
in consideration of the covenants of Seller contained herein, Purchaser and
Company represent and warrant to Seller (which representations and warranties
shall survive the Closing (subject to Section 10.1) regardless of any
examinations, inspections, audits and other investigations Seller have
heretofore made, or may hereafter make, with respect to such representations and
warranties) as follows:
4.1 Status. Each of Purchaser and Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Purchaser and Company each has full corporate power and authority and possesses
all governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to use its name and to own, lease or otherwise hold its
properties and assets and to carry on its business as presently conducted,
except where the failure to possess any such franchise, license, permit,
authorization or approval would not have a material adverse effect on Purchaser
or Company. Each of Purchaser and Company is duly qualified and in good standing
to do business in each jurisdiction in which the nature of its business or the
ownership, leasing or holding of its properties make such qualification
necessary, except where the failure to be so duly qualified and in good standing
would not have a material adverse effect on Purchaser or Company.
4.2 Authority. Each of Purchaser and Company has the requisite power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. Neither the execution or delivery of this Agreement by Purchaser or
Company nor the performance by Purchaser or Company of its obligations under
this Agreement will conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any contract, lease, license,
franchise, permit, indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which Purchaser or Company is a party or is bound,
its certificate of incorporation or by-laws or any applicable Law or Order.
Without limiting the generality of the foregoing, none of the registration
rights agreements to which the Company is a party prohibits the inclusion of the
Shares, as contemplated by Section 9.5, in any demand registration exercised or
exercisable thereunder.
4.3 Due Authorization. The execution and delivery by Purchaser and Company
of this Agreement, and the performance by Purchaser and Company of its
obligations hereunder, have been duly and validly authorized and approved by all
necessary action on the part of Purchaser and Company, respectively.
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4.4 Enforceability. This Agreement is binding upon, and enforceable
against, Purchaser and Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws affecting
creditors' rights generally and by principles of equity (whether in a proceeding
at law or in equity).
4.5 Consents. No consent, license, Permit, approval, order or
authorization of, or registration, declaration or filing with, any Authority or
any other Person is required to be obtained or made by or with respect to either
Purchaser or Company in connection with its execution and delivery of this
Agreement or the performance by it of its obligations hereunder.
4.6 Broker's or Consultant's Fees. Neither Purchaser nor Company has dealt
with any broker, finder or consultant in connection with any of the transactions
contemplated by this Agreement, and no other Person is entitled to any
commission or finder's fee in connection with the sale of the Purchased Assets
to Purchaser.
4.7 Capitalization. The authorized capital stock of the Company consists of
500,000,000 shares of common stock, $.001 par value, of which there were
69,052,196 shares issued and outstanding as of December 2, 2005 and 5,000,000
shares of Preferred Stock, $.01 par value, of which 1,000,000 are designated
Series A Mandatorily Redeemable Convertible Preferred Stock and 681,171 shares
of which were issued and outstanding and 825,000 shares are designated Series B
Convertible Redeemable Preferred Stock and 10,000 of which were issued and
outstanding as of November 29, 2005. To the best of the Company's knowledge, all
such outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and non-assessable. The Consideration, when issued
pursuant to this Agreement, will be duly authorized, validly issued, fully paid
and non-assessable and will be free of any liens, encumbrances, pre-emptive
rights, rights of first refusal or similar rights. The Company owns all of the
issued and outstanding shares of capital stock of the Purchaser.
4.8 Claims and Legal Proceedings
There is no claim, action, suit, arbitration, criminal or civil
investigation or proceeding pending or involving or, to the knowledge of Company
or Purchaser, threatened against Company or Purchaser before or by any court or
governmental or nongovernmental department, commission, board, bureau, agency or
instrumentality, or any other Person, that questions the validity of this
Agreement or any action taken or to be taken by Company or Purchaser pursuant to
this Agreement or in connection with the transactions contemplated hereby.
4.9 SEC Documents
The Company has made available or provided to Seller true and complete
copies of its Annual Report on Form 10-K/A for the fiscal year ended December
31, 2004, its Quarterly Reports on Form 10-Q for the fiscal quarters ending
March 31, 2005, June 30, 2005 and September 30, 2005, all Forms 8-K filed after
the date of the last of the Form 10-K or Forms 10-Q, and Proxy Statement
relating to its fiscal 2004 annual meeting of stockholders (collectively, the
"SEC Documents"). As of their respective filing dates, each of the SEC Documents
complied in all material respects with the requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
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4.11 Absence of Certain Changes. Since September 30, 2005, there has not
been any change that by itself or in conjunction with all other such changes,
has had or could reasonably be expected to have a material adverse effect on
Company or Purchaser, except as disclosed in the SEC Documents.
4.12 Full Disclosure. None of the representations and warranties made by
Purchaser and Company in this Agreement contains any untrue statement of a
material fact, or omits to state any material fact necessary to make the
statements contained in this Agreement not misleading. There is no fact known to
Purchaser or Company which (so far as Purchaser or Company reasonably foresees)
materially adversely affects, or in the future may materially adversely affect,
individually or in the aggregate, the ability of Purchaser and Seller to
consummate the transactions contemplated hereby that has not been set forth
herein or heretofore communicated to Seller in writing pursuant hereto.
ARTICLE V
PRE-CLOSING COVENANTS
The parties covenant and agree that from the date hereof through and
including the earlier of the Closing Date or the termination of this Agreement
in accordance with Article XI:
5.1 Ordinary Conduct. (a) From the date hereof to the Closing, Seller
shall conduct the Business in the Ordinary Course of Business. Seller shall use
commercially reasonable efforts to preserve and protect its goodwill, rights,
properties, the Purchased Assets and Business, to keep available to itself and
Purchaser the services of its employees, and to preserve and protect its
relationships with its employees, officers, advertisers, suppliers, customers,
creditors and others having business relationships with it; provided, however,
that Seller shall be entitled to continue its efforts to settle claims with its
creditors and take such other actions as necessary or advisable by it to comply
with the terms of this Agreement; and provided, further, that to the extent
Seller does not comply with financial obligations under the Assumed Contracts,
Seller shall not be deemed to have failed to comply with this Section 5.1 so
long as such financial obligations are disclosed on Schedule 2.1 hereto.
(b) From the date hereof to the Closing, Seller shall not enter into
any licensing or similar arrangement with respect to or affecting the Business
or the Purchased Assets.
5.2 Right of Inspection; Access to Books and Personnel. Seller shall and
shall cause each of Seller's officers, directors, employees, auditors and agents
to afford to Purchaser and Purchaser's officers, directors, employees, auditors,
agents and lenders the right at any time prior to the Closing, on reasonable
notice during normal business hours, access to Seller's employees, auditors,
agents, facilities, books and records as Purchaser reasonably shall deem
necessary or desirable and subject to such reasonable restrictions as Seller may
request to maintain the confidentiality of this Agreement and the transactions
contemplated hereby and shall furnish such financial and operating data and
other information with respect to Seller as Purchaser may reasonably require.
Except as otherwise set forth herein, no such access, examination or review
shall in any way affect, diminish or terminate any of the representations,
warranties or covenants of Seller set forth herein.
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5.3 Notification of Material Events.
(a) Seller shall promptly notify Purchaser in writing of any event
following the date hereof of which Seller is or becomes aware that will or may
reasonably be expected to have a material effect, including but not limited to a
material adverse effect, on the condition (financial or otherwise), rights,
properties, assets or prospects of Seller or the Business or the performance by
Seller of its obligations under this Agreement. Purchaser and Company shall
promptly notify Seller in writing of any event following the date hereof of
which Purchaser or Company is or becomes aware that will or may reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), rights, properties, assets or prospects of Purchaser or Company or
the performance by Purchaser and Company of each of their obligations under this
Agreement.
(b) Seller on the one hand and Purchaser and Company on the other
hand shall promptly notify the other of (a) the occurrence or non-occurrence of
any fact or event (regardless of the time of the occurrence or non-occurrence of
such fact or event) which would be reasonably likely (i) to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Closing Date or (ii) to cause any material covenant, condition or agreement
hereunder not to be complied with or satisfied in all material respects.
5.4 Supplemental Disclosures. Seller shall have the continuing obligation
to supplement promptly and amend the Schedules as necessary or appropriate with
respect to any matter hereafter arising or discovered which, if existing or
known at the date of this Agreement, would have been required to be set forth or
described in the Schedules; provided, however, that for the purpose of the
rights and obligations of the parties hereunder, any such supplemental or
amended disclosure shall not, except as Purchaser may otherwise agree in
writing, be deemed to have cured any breach of any representation or warranty
made in this Agreement. Notwithstanding anything to the contrary set forth in
this Agreement, in the event that Seller updates the Schedules hereto prior to
Closing (whether under Sections 5.3 or 5.4 or otherwise), and Purchaser and
Company proceed to consummate the transactions contemplated hereby, then
Purchaser and Company shall be deemed to have waived all rights of
indemnification hereunder with respect to the matters identified in such
updates. In addition, Purchaser and Company shall have no right to
indemnification with respect to any breach by Seller of any representation,
warranty, covenant or agreement herein if Purchaser or Company had actual
knowledge of such breach prior to Closing.
5.5 Exclusivity. Until the earlier to occur of (i) the termination of this
Agreement in accordance with Article XI or (ii) the Closing, (a) Seller shall
not, and shall not permit or authorize, as the case may be, any of Seller's
Affiliates which it controls, directors, officers, employees, agents or advisors
to, initiate, pursue or encourage (by way of furnishing information or
27
otherwise) any inquiries or proposals, or enter into any discussions,
negotiations or agreements (whether preliminary or definitive) with any Person,
contemplating or providing for any merger, acquisition, purchase or sale of
stock or all or substantially all of the assets or any business combination or
change in control of Seller or the Business, and (b) Seller shall deal
exclusively with Purchaser and Company with respect to the sale of the Purchased
Assets or the Business or assets and properties of Seller.
5.6 Publicity. Seller agrees that no public release or announcement
concerning the transactions contemplated hereby shall be issued by it without
the prior consent (which consent shall not be unreasonably withheld) of
Purchaser and Company, except as such release or announcement may be required by
Law or the rules or regulations of any Authority, in which case Seller shall
allow Purchaser and Company time to comment on such release or announcement in
advance of such issuance. Purchaser and Company agree that no public release or
announcement concerning the transactions contemplated hereby shall be issued by
them prior to the Closing without first providing Seller a reasonable
opportunity to review and provide comments on such public release or
announcement.
5.7 Power of Attorney; Right of Endorsement, Etc. Effective as of the
Closing, Seller hereby constitutes and appoints Purchaser and Company and each
of them its successors and assigns the true and lawful attorney of Seller with
full power of substitution, in the name of Purchaser or Company or Seller, on
behalf of and for the benefit of Purchaser and Company and each of them (a) to
collect all Purchased Assets, (b) to endorse, without recourse, checks, notes
and other instruments attributable to the Purchased Assets, (c) to defend and
compromise all actions, suits or proceedings with respect to any of the
Purchased Assets (subject to Section 10.7) and (d) to do all such reasonable
acts and things with respect to the Purchased Assets as Purchaser or Company may
deem advisable. Seller agrees that the foregoing powers are coupled with an
interest and shall be irrevocable by Seller directly or indirectly by the
dissolution of Seller or in any other manner. Purchaser and Company shall retain
for its own account any amounts lawfully collected pursuant to the foregoing
powers and Seller shall promptly pay to Purchaser any amounts received by Seller
after the Closing with respect to the Purchased Assets. Likewise, Purchaser and
Company shall promptly pay to Seller any amounts received by Purchaser or
Company after the Closing with respect to the Retained Assets.
5.8 Covenants Not to Compete, Solicit or Disparage.
(a) For the period of three years after the Closing Date (the "Time
Covenant"), Seller covenants that it shall not, either individually or as a
partner, joint venturer, consultant, shareholder, member or representative of
another Person or otherwise, directly or indirectly, participate in, engage in,
or have a financial or management interest in, or assist any other Person in any
business operation or any enterprise if such business operation or enterprise
engages, or would engage, in the Business anywhere in the world, provided,
however, that the foregoing shall not prohibit Seller from owning up to five
percent (5%) of a publicly traded company.
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(b) During the Time Covenant, Seller shall not, directly or
indirectly, whether for its own account or for the account of any Person (other
than Purchaser or Company) that is in competition with Purchaser (A) solicit,
recruit, hire, engage in any activity that would cause any Person who is as of
the Closing Date, or was during the 12 months prior to the Closing Date,
employed by Seller to violate any agreement with Purchaser, endeavor to entice
away any such Person from Purchaser, interfere with the relationship of
Purchaser with such Person or induce any such Person to reject any employment
offer by Purchaser or (B) solicit, entice or induce any Person who is, or was a
customer, distributor, agent, supplier, vendor, manufacturer or developer of any
product or service (collectively, "Customers and Suppliers") to (i) become
Customers and Suppliers of any other Person engaged in any business activity
that competes with the Business, (ii) cease doing business with Purchaser or
(iii) otherwise interfere with the relationship of Purchaser with any such
persons. Seller covenants that it will not, directly or indirectly, in any
capacity whatsoever, make any statement, written or oral, or perform any other
act or omission that is intended to be materially detrimental to the goodwill of
the business of Seller, except as compelled by judicial or administrative
process.
(c) If, during the Time Covenant, Seller is not in compliance with
such restrictions, then Purchaser shall be entitled, among other remedies, to
compliance by Seller with the terms of such provisions for an additional number
of days that equals the number of days during which such noncompliance occurred.
(d) The parties hereby agree that all restrictions and agreements
contained in this Section 5.8, including, without limitation, those relating to
the Time Covenant, are necessary and fundamental to the protection of the
Business and any objections or reservations to such restrictions or agreements
are hereby waived. Seller hereby agree that the remedy at law for any breach of
this Agreement will be inadequate, and that the damages flowing from such breach
are not readily susceptible to being measured in monetary terms. Accordingly,
the parties agree that upon Seller's breach of this Section 5.8, Purchaser shall
be entitled to immediate injunctive relief and may obtain a temporary order
restraining any threatened further breach. Nothing in this Agreement shall be
deemed to limit Purchaser's remedies at law or in equity for any breach by
Seller of any of the provisions of this Agreement that may be pursued by or made
available to Purchaser.
(e) Each of the foregoing agreements and covenants is in addition to
any other similar agreement and covenant contained in any other document entered
into in connection herewith and is not intended in any way, form or fashion to
limit the applicability of such other agreement or covenant.
5.9 Confidentiality. Seller on the one hand and Purchaser and Company on
the other, agrees, covenants and acknowledges that such Party will not, and will
cause its Affiliates which it controls not to, disclose, give, sell, use, or
otherwise divulge any confidential or secret information (including but not
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limited to any technology, process, trade secrets, know-how, other intellectual
property rights, strategies, financial statements or other financial information
not otherwise publicly available, forecasts, operations, business plans, prices,
discounts, products, product specifications, designs, plans, data or ideas) of
Seller relating to the Purchased Assets or the Business; provided, however, that
the provisions of this Section 5.9 shall not apply to (a) any disclosure
required by Law or the rules or regulations of any Authority, or (b) any
information which (i) is now, or hereafter becomes, through no act or failure to
act on the part of Seller on the one hand and Purchaser and Company on the
other, generally known or available to the public or (ii) is disclosed with the
prior written consent of Purchaser and Seller; and further provided, that the
obligations of Purchaser and Company pursuant to this Section 5.9 shall
terminate as of the Closing Date.
5.10 Certain Funds. Prior to the Closing, Purchaser and Company shall
provide to Seller the amount of funds set forth in Schedule 2.1 relating to the
purchase of capital stock of nonaccredited investors of Seller .
5.11 Performance of Contracts. With respect to each Assumed Contract,
Seller shall duly perform and comply with all covenants, agreements and
conditions required thereby to be performed or complied with by it prior to or
on the Closing Date; provided, however, that to the extent Seller does not
comply with financial obligations under such Assumed Contracts, Seller shall not
be deemed to have failed to comply with this Section 5.11 so long as such
financial obligations are disclosed on Schedule 2.1 hereto.
5.12 Employees. Upon the Closing, Seller shall terminate the employment or
engagement of each Person who is listed on Schedule 5.12 hereto (the
"Employees"). The Purchaser or Company shall offer employment to the Employees
indicated on Schedule 5.12 pursuant to the terms of the Employment Agreements
and to such other Employees (if any) on such terms as Purchaser and Company, in
their sole discretion, shall determine.
5.13 Assumed Contracts. If after the date hereof and prior to the Closing
Date, Purchaser determines that a Contract not listed on Schedule 2.1 should
constitute an Assumed Contract, Purchaser shall so notify Seller and the parties
shall jointly determine whether or not such Contract should be deemed an Assumed
Contract; provided, however, that unless the parties otherwise agree, if such
Contract is deemed by the parties to be an Assumed Contract, (i) Seller shall
obtain any necessary consent to the assignment of such Contract to Purchaser;
and (ii) Purchaser shall assume all liabilities and obligations thereunder
arising before and after the Closing Date.
5.14 Change of Name. Seller shall change its corporate name within five
(5) Business Days following the Closing.
5.15 Certain Warrants. The Seller is a party to certain warrant
agreements listed on Schedule 3.2, which in the aggregate would require the
Seller to issue up to 821,000 shares of the Seller's common stock. If such
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warrants were all exercised prior to the Closing, the warrant holders would be
entitled to participate with other holders of common stock, on a pro rata basis,
in any distribution of Shares made by Seller to its common shareholders
following the Closing. The Seller acknowledges that the warrant agreements are
Excluded Liabilities, and the Seller, and not the Purchaser, shall satisfy any
obligation to the holders of the warrants. If and when the escrowed Shares are
released to the Seller under the Escrow Agreement, the Seller shall set aside a
sufficient portion of such Shares to satisfy any obligations to the warrant
holders prior to making any distribution of such Shares to its common
shareholders, and will continue to hold such portion of the Shares for the
benefit of the warrant holders until the exercise or expiration of the warrants,
as applicable, at which time such Shares will be distributed to the warrant
holders or common shareholders, as appropriate, in each case, subject to
applicable law.
ARTICLE VI
CONDITIONS PRECEDENT TO PURCHASER'S AND COMPANY'S
OBLIGATIONS
6.1 Obligations to be Satisfied on or Prior to Closing Date. The
obligation of Purchaser and Company to purchase the Purchased Assets under this
Agreement is subject to the satisfaction (or waiver by Purchaser and Company),
on or prior to the Closing Date, of the following conditions:
(a) Accuracy of Representations and Warranties. Each of the
representations and warranties made by Seller in this Agreement that is
qualified as to materiality shall be true, correct and complete in all respects
and those that are not so qualified shall be true, correct and complete in all
material respects as of the date hereof and on the Closing Date as though made
on such date.
(b) Compliance with Agreement. Seller shall have performed or
complied in all material respects with the covenants, agreements and obligations
required by this Agreement to be performed or complied with by Seller on or
prior to the Closing Date.
(c) Investigation. Each of Purchaser, Company and Purchaser's and
Company's agents shall have been afforded access to Seller's books and records,
officers, employees, agents, facilities and personnel, as provided in Section
5.2.
(d) Consents. All consents, approvals, orders, authorizations,
registrations, declarations, agreements and filings of any Person and
Authorities set forth on Schedule 6.1(d) shall have been obtained or made by
Seller in a form reasonably satisfactory to Purchaser and shall be in full force
and effect as of the Closing Date, and no such authorizations, agreements and
consents shall impose any burdensome or, in Purchaser's reasonable
determination, unsatisfactory conditions or requirements on Purchaser.
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(e) No Adverse Proceedings. No Law shall have been enacted,
promulgated or proposed, and no investigation, action, suit or proceeding shall
have been threatened or instituted against Seller, Purchaser or Company as of
the Closing Date, which, in any such case, in the reasonable judgment of
Purchaser, challenges, or might result in a challenge to, the consummation of
the transactions contemplated hereby or operation of the Business, or might give
rise to a claim for damages against Seller, Purchaser or Company as a result of
the consummation of such transactions or operation of the Business.
(f) No Material Adverse Change. There shall have occurred no
material adverse change in or with respect to the condition (financial or
otherwise), business, rights, prospects, properties or assets or supplier,
customer or employee relationships of Seller or the Business since the date
hereof.
(g) Schedules. All amendments or supplements to the Schedules made
by Seller pursuant to Section 5.4 shall be acceptable to Purchaser in its
reasonable discretion; provided, that all amendments or supplements to Schedule
2.1 shall be acceptable to Purchaser in its absolute discretion.
(h) Closing Documents. Seller shall have delivered all reports,
agreements, certificates, instruments, opinions and other documents required to
be delivered by Seller on the Closing Date pursuant to Section 8.3, and the form
and substance of all such reports, agreements, certificates, instruments,
opinions and other documents shall be reasonably satisfactory to Purchaser and
Company.
(i) UCC, Tax Lien and Judgment Search Results. Seller shall have
provided Purchaser, at Purchaser's sole cost and expense, a report, in form and
substance satisfactory to Purchaser, as to the results of an examination of
financing statements filed under the Uniform Commercial Code, and tax lien and
judgment records, in each office in each such jurisdiction as Purchaser shall
reasonably require, and such report shall indicate no material security
interests, tax liens, judgments or other Liens not previously disclosed in
writing to Purchaser.
(j) Non-Competition. Each person so indicated on Schedule 6.1(j)
shall have agreed to be subject to the obligations of non-competition and
non-solicitation substantially the same as those to which the Company is
agreeing pursuant to Section 5.8, except that the term for such persons shall be
two years.
(k) Employment Agreement. Each person listed on Schedule 6.1(k)
shall have executed and delivered to Purchaser an employment agreement with
Purchaser and/or Company on terms and conditions which encompass the terms set
forth in such Schedule 6.1(k) (the "Employment Agreements").
(l) Confidentiality. Each person indicated on Schedule 6.1(l) shall
have agreed to be subject to the obligations of confidentiality substantially
the same as those to which the Company is agreeing pursuant to Section 5.9.
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(m) Intellectual Property. Seller shall have delivered to Purchaser
evidence reasonably satisfactory to Purchaser of the assignment to Purchaser of
certain intellectual property rights of Seller.
(n) Investment Representations. Seller shall have made and obtained
the investment representations set forth on Schedule 6.1(n) from each Person
entitled to receive any portion of the Consideration.
(o) Financial Statements. The Financial Statements and the Most
Recent Balance Sheet shall have been audited, at Purchaser's expense, by ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent certified public accountants, and
accompanied by the opinion of such accountants relating to such statements.
Seller shall have provided to Purchaser and Company any other financial
information necessary for the purpose of Company making the required filings
with the SEC that result from the transaction.
(p) Adequate Resources. Purchaser and Company shall have determined
in their reasonable discretion that they have raised funds sufficient to
discharge their financial obligations under this Agreement, including, without
limitation, those relating to the Assumed Liabilities and the operation of the
Business.
(q) Insurance. Purchaser and the Company shall have obtained
insurance at a cost reasonably acceptable to them covering the stem cells under
the customer stem cell storage contracts identified on Schedule 2.1 for such
coverage types and in such amounts to be mutually agreed by Seller and Purchaser
and covering claims made post-Closing whether or not the event giving rise to
the claim or loss occurred prior to or following the Closing (the "Stem Cell
Insurance").
6.2 Procedure for Failure to Satisfy Conditions. In the event that any of
the conditions precedent set forth above in Section 6.1 have not been satisfied,
Purchaser shall either (a) notify Seller in writing indicating its election to
terminate this Agreement pursuant to Section 11.1, or (b) close the transactions
contemplated by this Agreement, thereby waiving such conditions precedent. In
lieu of the foregoing, Purchaser and Seller may agree to consummate the
transactions contemplated by this Agreement on such additional terms as are
agreed to by Purchaser and Seller in writing.
ARTICLE VII
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
7.1 Obligations to Be Satisfied on or Prior to Closing Date. The
obligations of Seller to sell the Purchased Assets under this Agreement are
subject to the satisfaction (or waiver by Seller), on or prior to the Closing
Date, of the following conditions:
(a) Accuracy of Representations and Warranties. Each of the
representations and warranties made by Purchaser and Company in this Agreement
that is qualified as to materiality shall be true, correct and complete in all
respects and those that are not so qualified shall be true, correct and complete
in all material respects as of the date hereof and on the Closing Date as though
made on such date.
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(b) Compliance with Agreement. Purchaser and Company shall have
performed or complied in all material respects with the covenants, agreements
and obligations required by this Agreement to be performed or complied with by
it on or prior to the Closing Date.
(c) No Adverse Proceedings. No Law shall have been enacted or
promulgated, and no investigation, action, suit or proceeding shall have been
threatened or instituted against Seller, Purchaser or Company as of the Closing
Date, which, in any such case, in the reasonable judgment of Seller, challenges,
or might result in a challenge to, the consummation of the transactions
contemplated hereby, or which claims, or might give rise to a claim for, damages
against Seller as a result of the consummation of such transactions.
(d) Closing Documents. Purchaser and Company shall have delivered
all reports, agreements, certificates, instruments, opinions and other documents
required to be delivered by them on the Closing Date pursuant to Section 8.4,
and the form and substance of all such certificates, instruments, opinions and
other documents shall be reasonably satisfactory to Seller.
(e) Adequate Resources. Purchaser and Company shall have resources
reasonably adequate to discharge their financial obligations under this
Agreement, including, without limitation, those relating to the Assumed
Liabilities.
(f) No Material Adverse Change. There shall have occurred no
material adverse change in or with respect to the condition (financial or
otherwise), business, rights, prospects, properties or assets or supplier,
customer or employee relationships of Purchaser or Company since the date
hereof.
(g) Insurance. Purchaser and the Company shall have obtained the
Stem Cell Insurance.
7.2 Procedure for Failure to Satisfy Conditions. In the event that any of
the conditions precedent set forth above in Section 7.1 have not been satisfied,
Seller shall either (a) notify Purchaser in writing indicating its election to
terminate this Agreement pursuant to Section 11.1 or (b) close the transactions
contemplated by this Agreement, thereby waiving such condition precedent. In
lieu of the foregoing, Purchaser and Seller may agree to consummate the
transactions contemplated by this Agreement on such additional terms as are
agreed to by Purchaser and Seller in writing.
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ARTICLE VIII
CLOSING
8.1 Time and Place. The Closing shall take place at 1:00 p.m. on the
Closing Date at the offices of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC, 1251 Avenue of the
Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or at such other time and place as Seller and
Purchaser may mutually agree.
8.2 Closing Transactions. All documents and other instruments required to
be delivered at the Closing shall be regarded as having been delivered
simultaneously, and no document or other instrument shall be regarded as having
been delivered until all have been delivered.
8.3 Deliveries by Seller. At the Closing, Seller shall deliver or cause to
be delivered to Purchaser and Company:
(a) all such certificates, assignments and other documents and
instruments of sale, assignment, conveyance and transfer, as Purchaser, Company,
or its counsel may reasonably deem necessary or desirable to effect the transfer
of the Purchased Assets to Purchaser;
(b) the articles of incorporation of Seller, as amended, certified as
of a date not earlier than twenty (20) days prior to the Closing Date by the
Secretary of State of the State of California;
(c) a certificate of the Secretary or President of Seller certifying
to: (i) the by-laws, as amended, of Seller; (ii) resolutions of the board of
directors of Seller authorizing and approving the execution, delivery and
performance by Seller of this Agreement and any agreements, instruments,
certificates or other documents executed by Seller pursuant to this Agreement;
(iii) resolutions of the shareholders relating to the incumbency of the
Directors of Seller ;(iv) incumbency and signatures of the officers of Seller;
(d) a stock power executed in blank for use under the Escrow A
greement;
(e) such other instruments and documents as are required by any
other provisions of this Agreement to be obtained by or delivered on the Closing
Date by Seller to Purchaser and Company.
8.4 Deliveries by Purchaser and Company. At the Closing, Purchaser and
Company shall deliver or cause to be delivered to Seller (except insofar as the
conditions related to such delivery have been waived by Seller):
(a) stock certificates representing the Consideration, registered in
the name of Seller.
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ARTICLE IX
OTHER AGREEMENTS
9.1 Further Assurances. At any time and from time to time from and after
the Closing, Seller on the one hand, and Purchaser and Company on the other
hand, shall, at the request of the other, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, such instruments and other
documents and perform or cause to be performed such acts and provide such
information, as may reasonably be required to evidence or effectuate the sale,
conveyance, transfer, assignment and delivery to Purchaser of the Purchased
Assets or for the performance by Seller, Purchaser or Company of any of their
other respective obligations under this Agreement.
9.2 Access to Records After Closing. From and after the Closing Date,
Purchaser and Company and its representatives shall have reasonable access for
any purpose reasonably related to the Business, to inspect and copy all books
and records relating to Seller or the Business that it or its Affiliates may
retain after the Closing Date. Such access shall be afforded upon receipt by
Seller of reasonable advance notice and during normal business hours. Nothing
contained in this Section 9.2 shall require Seller to retain any books or
records longer than such books or records would otherwise have been retained in
the Ordinary Course of Business but for the transactions contemplated by this
Agreement.
9.3 Collection of Receivables. From and after the Closing, Purchaser shall
have the right and authority to collect for its own account all Accounts
Receivable under the Assumed Contracts and other items that are included in the
Purchased Assets and to endorse with the name of Seller, as applicable, any
checks or drafts received with respect to any such Accounts Receivable or other
items and Seller agrees promptly to deliver to Purchaser any cash or other
property received directly or indirectly by it with respect to such Account
Receivables and other items, including any amounts payable as interest.
9.4 Third Party Consents and Confidentiality Obligations. To the extent
that Seller's rights under any Assumed Contract may not be assigned without the
consent of another Person which has not been obtained as of the Closing Date,
this Agreement shall not constitute an agreement to assign the same if an
attempted assignment would constitute a breach thereof or be unlawful. If any
such consent shall not be obtained or if any attempted assignment would be
ineffective or would impair Purchaser's rights under the Purchased Assets such
that Purchaser would not in effect acquire the benefit of all such rights, then,
Seller, to the maximum extent permitted by law, shall act after the Closing Date
as Purchaser's agent in order to obtain for it the benefits thereunder and shall
cooperate with Purchaser in any other arrangement designated to provide such
benefits to Purchaser. In addition, with respect to confidentiality obligations
of third parties to Seller regarding confidential and proprietary information of
Seller that are contained in any of the agreements of Seller that constitute
Retained Assets, Seller shall likewise, to the maximum extent permitted by law,
act after the Closing Date as Purchaser's agent in order to obtain for it the
benefits thereunder and shall cooperate with Purchaser in any other arrangement
designated to provide such benefits under such agreements to Purchaser. Seller's
action as agent of Purchaser as provided herein shall be at the reasonable
expense of Purchaser.
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9.5 Registration of Shares.
9.5.1 Piggy Back. If the Company at any time prior to two years from
the date of the Closing proposes to file a registration statement with respect
to any of its equity securities (other than a registration statement on Form S-4
or S-8 or any successor or substantially similar form) (any of the foregoing, a
"Company Registration"), for its own account or for the account of any holder of
securities of the Company pursuant to demand registration rights granted by the
Company, to the extent not prohibited by the terms of such demand registration
rights (a "Requesting Securityholder" and, such registration, a "Requesting
Securityholder Registration"), then the Company shall in each case give written
notice of such proposed filing to Seller as representative of the holders of the
Shares at least 20 days before the anticipated filing date of any such
registration statement by the Company. Such notice shall offer to Seller and any
holders of the Shares the opportunity to have any or all of the Shares held by
them included in such registration statement and shall include the number of
shares proposed to be registered, the proposed filing date, the intended method
of distribution of such shares and the proposed managing underwriter, if any. If
Seller or any of the holders of the Shares desire to have the Shares registered
on such Company Registration, Seller or the holders of the Shares shall so
advise the Company in writing within 10 days after the date of receipt of such
notice (which request shall set forth the amount of Shares and the holder of
such Shares for which registration is requested), and the Company shall include
in such registration statement all such Shares so requested to be included
therein, subject to its receipt from any such holder of information required by
the rules and regulations of the SEC to be set forth in such registration
statement. If the registration statement relates to an underwritten offering,
such Shares shall be included in the underwriting on the same terms and
conditions as the securities otherwise being sold through the underwriters.
Seller or any holder of the Shares shall have the right to withdraw a request to
include Shares in any public offering pursuant to this provision by giving
written notice to the Company of its election to withdraw such request at least
10 business days prior to the proposed effective date of such registration
statement. Notwithstanding the foregoing, if the managing or lead underwriter or
underwriters of any such proposed underwritten offering advise the Company in
writing that the total number of securities which the Seller, the holders of the
Shares and the Company and any other persons or entities intended to be included
in such proposed underwritten offering exceeds the number that can be sold in
such offering within a price range acceptable to the Company (in the case of a
Company Registration) or to the Requesting Securityholder (in the case of a
Requesting Securityholder Registration), then the amount or kind of securities
offered at the request of Seller and the holders of the Shares shall be reduced
or eliminated in accordance with such managing underwriter's recommendation.
Expenses of registration, consisting of expenses relating to the Purchaser and
Company's compliance with this Section 9.5, including without limitation all
registration and "blue sky" qualification fees, printers' and accounting fees,
fees and disbursement of counsel for the Company shall be borne by the Company.
All selling commissions applicable to the sale of the Shares, including any fees
and disbursements of any special counsel to Seller and the holders of the Shares
shall not be expenses borne by the Company.
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9.5.2 Company Obligations. Whenever required to effect the
registration of any Shares under this Section 9.5, the Company shall:
(a) Prepare and file with the SEC a registration
statement with respect to such Shares and use
reasonable efforts to cause such registration statement to become effective and
to remain effective for so long as any holder of the Shares would be limited in
the number of Shares they could sell pursuant to the volume restrictions
contained in Rule 144(e)(1) of the Securities Act.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and
the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement.
(c) Furnish to the holders of the Shares such number
of copies of a prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Shares owned by
them that are included in such registration.
(d) Use reasonable efforts to register and qualify
the securities covered by such registration
statement under such other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the holders of the Shares, provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the managing
underwriter(s) of such offering. Each holder of Shares participating in such
underwriting shall also enter into and perform its obligations under such an
agreement.
(f) Notify each holder of Shares covered by such
registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
9.5.3 Current Information. From and after the Closing, the
Company shall timely comply with the requirements of Rule 144(c) of the
Securities Act.
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9.6 Insurance. From and after the Closing, Purchaser and the Company shall
use its best efforts to maintain the Stem Cell Insurance in full force and
effect at least through the end of the term of the Escrow Agreement.
ARTICLE X
INDEMNIFICATION
10.1 Survival of Representations, Warranties and Indemnity. The
representations and warranties of the Parties contained in Articles III and IV
and the indemnification obligations contained in this Article X shall survive
the Closing and expire one year following the Closing Date; provided, however,
that any claims which involve fraud or intentional misrepresentation shall
survive the Closing indefinitely; and provided, further, that if at the stated
expiration of any indemnification obligation there shall be pending any
indemnification claim pursuant to which notice has been given pursuant to
Section 10.6, such Party shall continue to have the right to seek such
indemnification with respect to such claim notwithstanding such expiration.
10.2 Indemnification by Seller. Seller shall indemnify, defend and hold
harmless Purchaser and Company and their respective members, officers,
directors, employees and agents after the Closing Date from and against any
loss, liability, obligation, Lien, damage, cost and expense (including
reasonable legal and accounting fees incurred in defending or prosecuting any
claim for any such liability, loss or damage) ("Purchaser Losses") arising out
of or resulting from:
(a) subject to Section 5.4, the untruth or inaccuracy as of the date
hereof and the Closing Date of any representation or warranty of Seller
contained in this Agreement or the Schedules hereto (or in any document,
writing, or certificate delivered by Seller under Article VI or VIII of this
Agreement);
(b) any Excluded Liability;
(c) the breach or failure by Seller to perform any of its covenants
or obligations hereunder;
(d) Undisclosed liabilities relating to the Assumed Contracts or the
Purchased Assets that arose prior to the Closing Date.
10.3 Indemnification by Purchaser and Company. Purchaser and Company shall,
jointly and severally, indemnify, defend and hold harmless Seller and its
officers, directors, employees and agents after the Closing Date from and
against any loss, liability, obligation, Lien, damage, cost and expense
(including reasonable legal and accounting fees incurred in defending or
prosecuting any claim for any such liability, loss or damage) arising out of or
resulting from:
(a) the untruth or inaccuracy as of the date hereof and the Closing Date of any
representation or warranty of Purchaser or Company contained in this Agreement
or the Schedules hereto (or in any document, writing, or certificate delivered
by Purchaser or Company under Articles VII or VIII of this Agreement);
39
(b) any liability or obligation assumed by Purchaser or Company pursuant to this
Agreement;
(c) the breach or failure by Company or Purchaser to perform any of their other
covenants or obligations hereunder;
(d) any claim, suit, action or proceeding which pertains to the ownership,
organization, operation or conduct of the Business by Purchaser or Company after
the Closing or to the other affairs of Purchaser or Company (unrelated to the
Business) prior to or after the Closing.
10.4 Limits on Indemnification. Notwithstanding anything to the contrary
set forth in this Agreement, (a) Seller on the one hand and Purchaser and
Company on the other hand shall be required to indemnify each other only if, and
then only to the extent that, any Losses exceed $5,000 in the aggregate;
provided, however, that such limitation shall not apply to any Excluded
Liability, or any failure by Company or Purchaser to pay or perform any Assumed
Liability or any obligation under Sections 5.10, 9.5 or 9.6, and (b) the
aggregate liability of Seller on the one hand and Purchaser and Company on the
other hand under Section 10.2 and 10.3 shall not exceed the Escrow Amount;
provided, however, that such limitation shall not apply to any Excluded
Liability, or any failure by Company or Purchaser to pay or perform any Assumed
Liability or any obligation under Sections 5.10, 9.5 or 9.6, or any claims by
Seller, Purchaser or the Company for fraud or willful misrepresentation.
10.5 Cross-indemnification for Broker's, Consultant's or Finder's Fees.
Purchaser and Company on the one hand and Seller on the other hand, each agree
to indemnify and hold harmless the other from and against any and all losses,
liabilities, obligations, Liens, damages, costs and expenses of any kind or
character arising from any claims for broker's, consultant's or finder's fees or
commissions or other similar fees in connection with the transactions covered by
this Agreement, insofar as such claims shall be based upon alleged arrangements
or agreements made by such party or on its behalf, which indemnity expressly
shall survive any termination of this Agreement or any Closing hereunder.
10.6 Procedure for Indemnification.
(a) If any Party is entitled to indemnification hereunder (the
"Indemnified Party") for any claim other than a third party claim, the
Indemnified Party shall promptly give written notice to the other Party (the
"Indemnifying Party") of the nature of the claim in detail and amount of the
claim. If an Indemnified Party shall claim indemnification hereunder arising
from any claim or demand of a third party (a "Third-Party Claim"), the
Indemnified Party shall promptly give written notice (a "Third-Party Notice") to
the Indemnifying Party of the basis for such claim or demand, setting forth the
nature of the claim or demand in detail and the amount of the claim.
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(b) In the event that an Indemnifying Party which receives notice of
an indemnification claim contests its liability for such indemnification claim,
such party shall send written notice to the Indemnified Party of its dispute of
indemnification within 15 days thereof. If the parties are unable to resolve
such dispute of indemnification within 60 days after the date of the notice of
dispute, the Indemnified Party may bring an action against the Indemnifying
Party to enforce such indemnification claim.
(c) The Indemnifying Party shall have the right to compromise or, if
appropriate, defend at its own cost and through counsel of its own choosing, any
claim or demand giving rise to any such claim for indemnification. In the event
the Indemnifying Party undertakes to compromise or defend any such claim or
demand, it shall promptly (and in any event, no later than fifteen (15) days
after receipt of a Third-Party Notice) notify the Indemnified Party in writing
of its intention to do so. The Indemnified Party shall fully cooperate with the
Indemnifying Party and its counsel in the defense or compromise of such claim or
demand. After the assumption of the defense by the Indemnifying Party, the
Indemnified Party shall not be liable for any legal or other expenses
subsequently incurred by the Indemnifying Party, in connection with such defense
(unless the Indemnifying Party disputes its liability for such indemnification
claim and an arbitration pursuant to Section 10.13 determines that the
Indemnifying Party is not liable to indemnify the Indemnified Party), but the
Indemnified Party may participate in such defense at its own expense. No
settlement of a Third-Party Claim defended by the Indemnifying Party shall be
made without the written consent of the Indemnified Party, such consent not to
be unreasonably withheld. The Indemnifying Party shall not, except with the
written consent of the Indemnified Party, consent to the entry of a judgment or
settlement of a Third-Party Claim which does not include as an unconditional
term thereof, the giving by the claimant or plaintiff to the Indemnified Party
of an unconditional release from all liability in respect of such Third-Party
Claim.
10.7 Payment. Except for Third-Party Claims being defended in good faith by
the Indemnifying Party in accordance with Section 10.6, the Indemnifying Party
shall satisfy its obligations hereunder within fifteen (15) days after receipt
of notice of a claim, unless the Indemnifying Party has contested its liability
for indemnification pursuant to Section 10.5 in which case no payment shall be
due from the Indemnifying Party unless its liability therefor is established by
final nonappealable court order or judgment and fifteen (15) days have passed
since the entry of such order or judgment.
10.8 Limited Recourse against Seller and its shareholders. Any claims for
indemnification or damages against Seller which arise after the Closing shall be
satisfied solely from the Escrow Amount; provided, however, there shall be no
limitations and the Seller and its Affiliates shall remain liable for any claims
involving fraud or willful misrepresentation.
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10.9 Reduction for Insurance and Taxes. The amount of any payment to any
Indemnified Party pursuant to this Article X shall be reduced by the amount of
any insurance proceeds actually received by or on behalf of the Indemnified
Party in reduction of the related indemnifiable loss. An Indemnified Party which
subsequently receives insurance proceeds in respect of the related indemnifiable
loss shall pay to the Indemnifying Party the amount of such actually received
insurance proceeds. Where any tax benefit is available to the Indemnified Party
with respect to an indemnifiable event, the amount of any payment with respect
to such indemnifiable loss shall be reduced dollar for dollar by the amount of
such tax benefit actually received.
10.10 Remedies Exclusive. The remedies provided in this Article X shall be
the exclusive remedies of the parties hereto after the Closing in connection
with any breach of a representation or warranty, non-performance, partial or
total, of any covenant or agreement contained herein or any other matter
relating to the transactions contemplated hereby. Nothing contained herein,
however, shall preclude a party from seeking injunctive relief or specific
performance, under circumstances where such relief might be appropriate,
provided that the moving party shall not be entitled to ancillary relief in the
nature of damages or fee awards unless specifically so provided for herein.
10.11 No Consequential Damages. The Indemnifying Party shall not be liable
to the Indemnified Party for consequential, enhanced, punitive or special
damages or the like unless such damages are included in a Third-Party Claim and
the Indemnified Party is liable to the third party claimant for such damages.
10.12 Escrow.
(a) As provided for in Section 1.2, on the Closing Date, the
Purchaser shall deliver 60% of the Consideration (the "Escrow Amount") to the
Escrow Agent with stock power endorsed in blank to be used only in accordance
with the Escrow Agreement; provided, that all Consideration shall be issued in
Seller's name. The Escrow Agent shall retain and disburse the Escrow Amount
pursuant to the escrow agreement attached as Exhibit A hereto (the "Escrow
Agreement").
(b) The Escrow Agreement shall provide that the Escrow Amount shall
be applied, subject to the conditions provided for in Article X, to pay claims
for Purchaser Losses that have not been contested as provided for in Section
10.6(b) ("Uncontested Claims") and claims for Purchaser Losses that have been
resolved in favor of Purchaser (to the extent so resolved) pursuant to a final
nonappealable court judgment or by agreement of Seller on the one hand and
Purchaser and Company on the other hand ("Resolved Claims") and to secure claims
for the Purchaser Losses as to which Seller has been notified (pursuant to
Section 10.6(a)) and the Escrow Agent and which are neither Uncontested Claims
nor Resolved Claims ("Pending Claims"). Upon the expiration of one (1) year
following the Closing Date, Escrow Agent shall release to Seller an amount equal
to the remaining Escrow Amount, less the aggregate amount of the then Pending
Claims and shall continue thereafter to retain funds equal to the amount of the
Pending Claims until directed otherwise by agreement of Purchaser, Company and
Seller or by court order.
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(c) Notwithstanding anything to the contrary in the Escrow Agreement or
this Agreement, Seller reserves the right to satisfy any indemnification
obligation in cash, in which case there shall be no offset against the Escrow
Amount for such obligation.
10.13 Bulk Sales. Notwithstanding anything herein to the contrary, Seller
will indemnify and hold harmless Purchaser and Company and other third parties
from and against any and all Losses resulting from or arising out of any
noncompliance or alleged noncompliance by Purchaser or Seller with applicable
bulk sales laws.
ARTICLE XI
TERMINATION
11.1 Rights to Terminate. This Agreement may be terminated at any time
prior to the Closing only as follows:
(a) by mutual written consent of Seller, Purchaser and Company;
(b) by Seller if Purchaser or Company is in material breach of any
representation, warranty or covenant under this Agreement (and Seller is not
then in material breach of any representation, warranty or covenant) and
Purchaser or Company has failed to cure such breach within 10 Business Days
following written notice thereof from Seller;
(c) by Purchaser or Company if Seller is in material breach of any
representation, warranty or covenant under this Agreement (and Purchaser and
Company are not then in material breach of any representation, warranty or
covenant) and Seller has failed to cure such breach within 10 Business Days
following written notice thereof from Purchaser or Company;
(d) by Seller if, at or before the Closing Date, any condition set
forth herein for the benefit of Seller shall not have been timely met and cannot
be met on or before the Closing Date and has not been waived; or
(e) by Purchaser or Company if, at or before the Closing Date, any
condition set forth herein for the benefit of Purchaser or Company shall not
have been timely met and cannot be met on or before the Closing Date and has not
been waived; or
(f) by Purchaser, Company or Seller if the Closing shall not have
occurred on or before January 31, 2006.
Each party's right of termination hereunder is in addition to any of the
rights it may have hereunder.
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11.2 Effects of Termination. Notwithstanding any other provision of this
Agreement, no termination of this Agreement shall release any party of any
liabilities or obligations arising hereunder for any pre-termination breaches
hereof or misrepresentations made herein. In the event of any termination of
this Agreement, (a) each party shall return or destroy all documents containing
confidential information of the other party (and, upon request, certify as to
the destruction thereof), and (b) no party hereto shall use for any purpose, or
disclose to any third party, any such confidential information of the other
party, except as required by law or legal process.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Notices. All notices or other communications required or permitted by
this Agreement shall be in writing and shall be deemed to have been duly
received (a) if given by telecopier, when transmitted and the appropriate
telephonic confirmation received if transmitted on a business day and during
normal business hours of the recipient, and otherwise on the next Business Day
following transmission, (b) if given by certified or registered mail, return
receipt requested, postage prepaid, three Business Days after being deposited in
the U.S. mails and (c) if given by courier or other means, when received or
personally delivered, and, in any such case, addressed as follows:
(i) if to Purchaser or Company:
Phase III Medical, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, PC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Seller:
NeoStem, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
44
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
Attorneys at Law
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other addresses as may be specified by any such Persons to the other
Persons, pursuant to notice given by such Person in accordance with the
provisions of this Section 12.1.
12.2 Assignment. No party may assign or transfer any or all of its rights
or obligations under this Agreement without the prior written approval of the
other parties; provided, however, that Purchaser may assign or transfer all (but
not less than all) of its rights and obligations under this Agreement (a) to any
Person that is wholly-owned, directly or indirectly, by Purchaser or is an
Affiliate of Purchaser or (b) after the Closing, to any Person to whom Purchaser
sells all or substantially all the Purchased Assets, provided further, that at
any time Purchaser may collaterally assign its rights hereunder to any Person or
Persons providing financing to Purchaser in connection with the transactions
contemplated hereby.
12.3 Benefit of the Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Except as set forth in Section 9.5 with respect to
registration of Shares held by any transferee of the Consideration and Article X
with respect to indemnification of indemnified parties hereunder, nothing in
this Agreement shall confer any rights upon any Person other than the parties
hereto and their respective successors and assigns.
12.4 Exhibits and Schedules. The Exhibits and Schedules hereto shall be
construed with and as an integral part of this Agreement to the same effect as
if the contents thereof had been set forth verbatim herein. References in this
Agreement and in the Schedules are made for convenient reference only, and all
matters disclosed in any Schedule shall be deemed to be disclosed in each
Schedule.
12.5 Headings. The headings used in this Agreement are for convenience of
reference only and shall not be deemed to limit, characterize or in any way
affect the interpretation of any provision of this Agreement.
45
12.6 Entire Agreement. This Agreement contains the entire agreement and
understanding of the parties with respect to the subject matter hereof,
supersedes all prior agreements between and among the Parties with respect to
the Business (including, but not limited to the Joint Venture Agreement dated as
of March 31, 2004 and the revenue sharing agreement dated as of September 9,
2005) and no other representations, promises, agreements or understandings
regarding the subject matter hereof shall be of any force or effect unless in
writing, executed by the party to be bound thereby and dated on or after the
date hereof.
12.7 Modifications and Waivers. No change, modification or waiver of any
provision of this Agreement shall be valid or binding unless it is in writing,
dated subsequent to the date hereof and signed by Purchaser and Seller. No
waiver of any breach, term or condition of this Agreement by any party shall
constitute a subsequent waiver of the same or any other breach, term or
condition.
12.8 Counterparts. This Agreement may be executed in counterparts
(including by facsimile transmission), each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
12.9 Severability. In case any one or more of the provisions contained
herein for any reason shall be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision or provisions had never been
contained herein.
12.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (EXCLUSIVE OF THE
CONFLICT OF LAW PROVISIONS THEREOF).
12.11 Expenses. Company and Purchaser shall pay all reasonable costs and
expenses incurred or to be incurred by all Parties in negotiating and preparing
this Agreement and in closing and carrying out the transactions contemplated by
this Agreement; provided, however, that Company shall only be responsible for
costs and expenses of Seller not exceeding $50,000; and, provided further that
Seller's costs and expenses shall be paid at the Closing.
12.12 JURISDICTION; WAIVER OF JURY TRIAL; VENUE.
(a) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES
OF AMERICA SITTING IN NEW YORK COUNTY, NEW YORK, AND ANY APPELLATE COURT FROM
ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
46
DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW,
IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT IN
THE COURTS OF ANY OTHER JURISDICTION.
47
(b) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(c) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY NEW
YORK STATE OR FEDERAL COURT SITTING IN NEW YORK COUNTY, NEW YORK. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement the date first written above.
NEOSTEM, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇▇▇
---------------------------
Title: President
---------------------------
PHASE III MEDICAL, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Title: President & CEO
---------------------------
PHASE III MEDICAL HOLDING
COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Title: President & CEO
---------------------------
48