AGREEMENT FOR PURCHASE AND SALE OF ASSETS by and between BBM HOLDINGS, INC. (“Buyer”) and SHALOM HIRSCHMAN (“Seller”) November 12, 2008
AGREEMENT
FOR PURCHASE AND SALE OF ASSETS
by
and between
(“Buyer”)
and
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
(“Seller”)
November
12, 2008
TABLE
OF CONTENTS
|
ARTICLE
1 DEFINITIONS
|
1
|
|
|
ARTICLE
2 PURCHASE AND SALE OF ASSETS
|
4
|
|
|
2.1.
|
Sale
And Transfer Of Assets
|
4
|
|
2.2.
|
Excluded
Liabilities
|
4
|
|
2.3.
|
Consideration
From Buyer.
|
5
|
|
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||
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ARTICLE
3 REPRESENTATIONS AND WARRANTIES OF SELLER
|
5
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|
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3.1.
|
Binding
Obligation
|
5
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3.2.
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Noncontravention
|
5
|
|
3.3.
|
Intellectual
Property.
|
5
|
|
3.4.
|
Other
Intangible Assets
|
6
|
|
3.5.
|
Title
to Assets; Sufficiency of Assets
|
6
|
|
3.6.
|
Litigation
|
6
|
|
3.7.
|
Tax
Matters.
|
7
|
|
3.8.
|
Legal
Compliance
|
7
|
|
3.9.
|
Brokers’
Fees
|
7
|
|
3.10.
|
Full
Disclosure
|
7
|
|
ARTICLE
4 BUYER’S WARRANTIES
|
7
|
|
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4.1.
|
Organization,
Standing and Qualification
|
7
|
|
4.2.
|
Authority
and Consents
|
7
|
|
4.3.
|
Binding
Obligation
|
7
|
|
4.4.
|
Noncontravention
|
8
|
|
4.5.
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Brokers’
Fees
|
8
|
|
ARTICLE
5 OBLIGATIONS PRIOR TO CLOSING
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8
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5.1.
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Pre-Closing
Covenants
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8
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5.2.
|
General
|
8
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|
5.3.
|
Operation
of Business; Immunomodulator Assets
|
8
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|
5.4.
|
Notice
of Developments
|
8
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ARTICLE
6 THE CLOSING
|
8
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|
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6.1.
|
Time
and Place
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8
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|
6.2.
|
Conditions
to Obligation of Buyer
|
9
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6.3.
|
Conditions
to Obligation of Seller
|
10
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|
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||
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ARTICLE
7 TERMINATION
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10
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7.1.
|
Termination
of Agreement
|
10
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7.2.
|
Effect
of Termination
|
11
|
|
ARTICLE
8 OBLIGATIONS AFTER CLOSING
|
11
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|
|
8.1.
|
Competition
|
11
|
|
8.2.
|
Information
to be Held in Confidence
|
11
|
|
8.3.
|
Further
Assurances
|
12
|
|
ARTICLE
9 NATURE AND SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS
|
12
|
|
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9.1.
|
Survival
of Representations and Warranties
|
12
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|
9.2.
|
Indemnification
by Seller
|
12
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|
9.3.
|
Indemnification
by Buyer
|
13
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|
9.4.
|
Notice
of Claim.
|
13
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|
9.5.
|
Procedure.
|
13
|
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ARTICLE
10 COSTS AND TAXES
|
14
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|
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10.1.
|
Costs
and Taxes
|
14
|
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ARTICLE
11 MISCELLANEOUS
|
14
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|
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11.1.
|
Effect
of Headings
|
14
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11.2.
|
Word
Usage
|
14
|
|
11.3.
|
Entire
Agreement; Modification; Waiver
|
15
|
|
11.4.
|
Counterparts;
Delivery
|
15
|
|
11.5.
|
Press
Releases and Public Announcements
|
15
|
|
11.6.
|
Parties
In Interest
|
15
|
|
11.7.
|
Assignment
|
15
|
|
11.8.
|
Notices
|
15
|
|
11.9.
|
Governing
Law; Venue
|
16
|
|
11.10.
|
Severability
|
16
|
|
11.11.
|
Incorporation
of Exhibits and Schedules
|
17
|
|
Construction
|
17
|
|
|
11.13.
|
Force
Majeure
|
17
|
AGREEMENT
FOR PURCHASE AND SALE OF ASSETS
This
Agreement for Purchase and Sale of Assets (“Agreement”)
is
made as of November 12, 2008, between BBM Holdings, Inc. (“Buyer”),
a
Utah corporation, having its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (“Seller”),
an
individual, residing at _____________________. Buyer and Seller are referred
to
collectively herein as the “Parties”
and
individually as a “Party.”
RECITALS
WHEREAS,
Buyer desires to purchase from Seller and Seller desires to sell to Buyer,
on
the terms and subject to the conditions of this Agreement, all of the
Immunomodulator Assets (as defined below) of Seller in exchange for the issuance
of a Warrant to Buyer described in this Agreement;
NOW,
THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained in this Agreement, the parties agree
as follows:
AGREEMENT
ARTICLE
1 DEFINITIONS
As
used
in this Agreement, the following defined terms have the following
meanings:
“Affiliate”
means
with respect to any Person, a Person that directly, or indirectly through one
or
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified.
“Ancillary
Documents”
means
the ▇▇▇▇ of Sale, the Consulting Agreement, the Invention Assignment and
Non-Competition Agreement, the Registration Rights Agreement, the Warrant and
all other documentation necessary to facilitate the transfer of the
Immunomodulator Assets to Buyer.
“▇▇▇▇
of Sale”
means
the ▇▇▇▇ of sale providing for the transfer of the Immunomodulator Assets dated
the Closing Date, in substantially the form attached hereto as Exhibit
A,
duly
executed by Seller.
“Buyer
Indemnitees”
has
the
meaning set forth in Section 9.2 below.
“Buyer
Material Adverse Effect”
shall
mean any change, effect, event, circumstance, occurrence or state of facts
that
materially impairs the ability of Buyer to consummate the transactions
contemplated by this Agreement or perform its obligations
hereunder.
“Cash
Payment”
has
the
meaning set forth in Section 2.3 below.
“Claiming
Party”
has
the
meaning set forth in Section 9.4 below.
“Closing”
has
the
meaning set forth in Section 6.1 below.
1
“Closing
Date”
has
the
meaning set forth in Section 6.1 below.
“Consulting
Agreement”
means
the consulting agreement by and between Buyer and Seller dated the Closing
Date,
in substantially the form attached hereto as Exhibit
B,
duly
executed by Buyer and Seller.
“Contaminant”
means
any substance regulated under any Environmental Law as a pollutant, hazardous
substance or toxic waste.
“Damages”
has
the
meaning set forth in Section 9.2 below.
“Encumbrance”
means
any lien, pledge, hypothecation, charge, mortgage, deed of trust, security
interest, encumbrance, claim, infringement, option, right of first refusal,
preemptive right, community property interest, or restriction of any nature
on
any asset.
“Environmental
Law”
means
any law, statute, regulation, rule or order of, or administered or enforced
by,
a Governmental Authority which is related to or otherwise imposes liability
or
standards of conduct concerning discharges, releases or threatened releases
of
Contaminants into ambient air, water or land, or otherwise relating to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of Contaminants.
“Excluded
Liabilities”
has
the
meaning set forth in Section 2.2 below.
“Governmental
Authority”
means
any nation or government, any state or other political subdivision thereof,
any
regulatory agency or body and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.
“Immunomodulator
Assets”
means
Intellectual Property, technology and other assets of Seller relating to
Immunomodulators, including without limitation the Immunomodulator Technology,
the Immunomodulator IP Assets identified on Schedule
3.3
hereto,
and all assets and technology listed on Schedule
1(b),
and
intangible assets listed on Schedule
3.4,
whether
tangible, intangible, real, personal, or mixed, and wherever located.
“Immunomodulator
IP Assets”
has
the
meaning set forth in Section 3.5 below, and includes the assets identified
on
Schedule
3.3
hereto.
“Immunomodulator
Technology”
means
any ideas, disclosures, or inventions for interactive lighting technology
including related software, hardware, power supplies, circuitry, panels,
assembly tools, methods, and techniques, any technology related to or developed
in part for object sensing including software, hardware, power supplies,
circuitry, panels, assembly tools, methods, and techniques, and any technology
related to or developed in part for electroluminescence including software,
hardware, power supplies, circuitry, panels, assembly tools, methods, and
techniques.
“Immunomodulators”
has
the
meaning set forth on Schedule
1(a).
“Indemnitee”
shall
mean a Buyer Indemnitee or Seller Indemnitee, as the case may be.
2
“Indemnitor”
has
the
meaning set forth in Section 9.4 below.
“Intellectual
Property”
means,
all of the following in any jurisdiction throughout the world: (a) all
inventions and designs (whether patentable or unpatentable and whether or not
reduced to practice), all improvements thereto, and all patents, patent
applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and re-examinations
thereof, (b) all registered and unregistered trademarks, service marks, trade
dress, logos, slogans, trade names, corporate names, Internet domain names
and
rights in telephone numbers, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and
all
applications, registrations, and renewals in connection therewith, (e) all
trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including source
code, executable code, data, databases and related documentation), (g) all
advertising and promotional materials, (h) all other proprietary rights, (i)
all
copies and tangible embodiments thereof (in whatever form or medium), and (j)
all rights to ▇▇▇ or make any claims for any past, present, or future
misappropriation or unauthorized use of any of the foregoing rights and the
right to receive income, royalties, damages, or payments that are now or will
later become due with regard to the foregoing rights.
“Invention
Assignment and Non-Competition Agreement”
means
the invention assignment and non-competition between Buyer and Seller dated
the
Closing Date, in substantially the form attached hereto as Exhibit
C,
duly
executed by Buyer and Seller.
“Ordinary
Course of Business”
means
the ordinary course of business consistent with past custom and
practice.
“Parties”
and
“Party”
have
the meanings set forth in the preamble above.
“Person”
means
any individual, corporation, joint venture, partnership, estate, trust, company
(including any limited liability company), firm, other enterprise, association,
organization, or Governmental Authority.
“Proceeding”
means
any claim, action, suit, investigation, or administrative or other proceeding
before any Governmental Authority or any arbitration or mediation.
“Purchase
Price”
has
the
meaning set forth in Section 2.3 below.
“Registration
Rights Agreement”
means
the registration rights agreement, between Buyer and Seller, dated the Closing
Date in substantially the form attached hereto as Exhibit
D,
duly
executed by Buyer and Seller.
“Seller
Indemnitees”
has
the
meaning set forth in Section 9.3 below.
3
“Seller
Material Adverse Effect”
shall
mean any change, effect, event, circumstance, occurrence or state of facts
that
(a) causes a diminution in the value of the between Immunomodulator Assets,
individually or in the aggregate, of more than ten thousand US dollars (US
$10,000), regardless of whether covered by insurance, or (b) materially impairs
the ability of Seller to consummate the transactions contemplated by this
Agreement or perform its obligations hereunder or under any Ancillary Document.
“Seller’s
Knowledge”
means
(i) the actual knowledge of ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and (ii) knowledge that could
be obtained after reasonable inquiry and investigation of the matter in
question.
“Tax”
or
“Taxes”
means
taxes of any kind payable to any federal, state, local or foreign taxing
authority, including, without limitation, (a) income, gross receipts, ad
valorem, value added, sales, use, service, franchise, profits, real or personal
property, capital stock, license, payroll, withholding, employment, social
security, workers compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premium, windfall profits, transfer
and
gains taxes, (b) customs duties, imposts, charges, levies, or other assessments
of any kind, (c) interest, penalties, and additions to tax imposed with respect
to the above taxes, and (d) any damages, costs, expenses, fees or other
liability arising from such Tax or Taxes.
“Third
Party Claim”
has
the
meaning set forth in Section 9.4 below.
“Warrant”
means
a
warrant issued by Buyer to Seller exercisable from the Closing Date through
the
fifth anniversary thereof, for up to 5,000,000 shares of common stock, $.0001
par value per share, of Buyer at an exercise price of $0.50, in substantially
the form attached hereto as Exhibit
E,
duly
executed by Buyer.
ARTICLE
2 PURCHASE
AND SALE OF ASSETS
2.1. Sale
And Transfer Of Assets.
Subject
to the terms and conditions set forth in this Agreement, at the Closing, Seller
will sell, convey, transfer, assign, and deliver to Buyer, and Buyer will
purchase from Seller, all Seller’s rights and title to, and interest in, the
Immunomodulator Assets, free and clear of all Encumbrances.
2.2. Excluded
Liabilities.
All
liabilities of Seller (the “Excluded
Liabilities”),
whether arising prior to or after the Closing Date, shall be retained by and
remain obligations of Seller, and Buyer shall not assume any Excluded
Liabilities. In furtherance and not in limitation of the foregoing, the Excluded
Liabilities include, but are not limited to: (i) any liability or obligation
of
Seller incurred under or in connection with this Agreement, (ii) any liability
or obligation for borrowings or other indebtedness incurred by Seller, (iii)
Seller’s accounts payable, (iv) any liability or obligation of Seller under to
employees of Seller; (v) any liability or obligation arising out of any action,
suit or proceeding against Seller (including any infringement action) whether
or
not pending on the Closing Date, (vi) any liability or obligation of Seller
arising out of or relating to Environmental Laws or Contaminants, (vii) any
and
all Taxes of Seller, and (viii) any liability or obligation of Seller arising
out of or related to the Immunomodulator Assets.
4
2.3. Consideration
From Buyer.
At the
Closing, as full payment for the transfer of the Immunomodulator Assets to
Buyer, Buyer shall deliver to Seller the Warrant (the “Purchase
Price”).
ARTICLE
3 REPRESENTATIONS
AND WARRANTIES OF SELLER
Seller
represents and warrants to Buyer, subject to the disclosure schedules annexed
hereto, as follows as of the date hereof and as of the Closing
Date:
3.1. Binding
Obligation.
This
Agreement and the Ancillary Documents constitute valid and binding obligations
of Seller, enforceable by Buyer against Seller in accordance with their
respective terms.
3.2. Noncontravention.
Neither
the execution and the delivery of this Agreement and the Ancillary Documents,
nor the consummation of the transactions contemplated hereby or thereby will
(i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any Governmental
Authority to which Seller is subject or any provision of the charter or bylaws
of Seller or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any Person the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Seller is a party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Encumbrance upon any of its assets).
Seller is not required to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any Person in order to consummate
the
transactions contemplated by this Agreement and the Ancillary
Documents.
3.3. Intellectual
Property.
(a) Seller
owns all Intellectual Property included in the Immunomodulator Assets (the
“Immunomodulator
IP Assets”)
free
and clear of any Encumbrances, and none of the Immunomodulator IP Assets are
subject to any third party license, agreement or other permission. The
Immunomodulator IP Assets constitute all Intellectual Property owned by Seller
and used at any time by Seller or which Seller has a right to use in connection
with Immunomodulators.
(b) The
use
of the Immunomodulator IP Assets by Seller does not infringe on, misappropriate,
or otherwise conflict with any Intellectual Property right of any third party
and no third party has asserted or threatened to assert against Seller any
claim
of infringement or misappropriation of any Intellectual Property rights. Seller
has the full right to transfer to Buyer the Immunomodulator IP Assets at the
Closing, and the transfer of the Immunomodulator IP Assets to Buyer will not
infringe on any Intellectual Property right of any third party. No third party
has interfered with, infringed on, or misappropriated any Intellectual Property
rights of Seller in the Immunomodulator IP Assets.
(c) Schedule
3.3
identifies all of the following Immunomodulator IP Assets: (i) each patent,
copyright, mask work, trademark, or service ▇▇▇▇ (or registration of such)
that
has been granted or registered and issued to Seller in any jurisdiction, (ii)
each pending patent application and each application for registration of a
copyright, mask work, trademark, service ▇▇▇▇, or similar right that Seller
has
made in any jurisdiction together with all associated filing or serial numbers,
(iii) all unregistered copyrights, (iv) all unregistered trademarks, trade
names, or service marks used by Seller, and (v) ideas and disclosures related
to
Immunomodulator Technology. Seller has not granted any license or other
permission in the Immunomodulator IP Assets to any third party. Seller has
delivered to Buyer true, correct, and complete copies of all registrations,
applications, licenses, agreements, and permissions related to the
Immunomodulator IP Assets. For each of the Immunomodulator IP Assets identified
on Schedule
3.3:
(i)
Seller possesses all right and title to, and interest in, such assets free
and
clear of any Encumbrance; (ii) such assets are not subject to any outstanding
judgment, order, or charge; and (iii) no proceeding is pending or, to Seller’s
Knowledge, threatened that challenges the legality, validity, enforceability,
use, or ownership of such assets.
5
(d) All
employees, contractors, and consultants of Seller or any other third parties
who
have been involved in the development of any Immunomodulator IP Assets, have
executed invention assignment and confidentiality agreements in the form
delivered to Buyer’s counsel, and all employees and consultants of Seller who
have access to confidential information or trade secrets related to or
comprising the Immunomodulator IP Assets have executed appropriate nondisclosure
agreements in the form delivered to Buyer’s counsel. Seller has taken reasonable
steps, consistent with industry standards, to protect the secrecy and
confidentiality of all of the Immunomodulator IP Assets. To Seller’s Knowledge,
no third party is in possession of any confidential information pertaining
to
any of the Immunomodulator IP Assets, except under a written confidentiality
agreement in a form disclosed in writing to Buyer.
3.4. Other
Intangible Assets.
Schedule
3.4
to this
Agreement is a complete and accurate list of all intangible assets, other than
those specifically referred to elsewhere in this Agreement, relating to or
included in the Immunomodulator Assets.
3.5. Title
to Assets; Sufficiency of Assets.
Seller
has good and marketable title to all of the Immunomodulator Assets and
Immunomodulator Technology, whether real, personal, mixed, tangible, or
intangible. All of the Immunomodulator Assets are owned by Seller free and
clear
of any Encumbrances. At the Closing, Buyer shall acquire good and marketable
title to all of the Immunomodulator Assets, whether real, personal, mixed,
tangible, or intangible. The Immunomodulator Assets constitute all of the
assets, rights and properties of Seller owned or used or held for use
exclusively or primarily in connection with Immunomodulators and constitute
all
the assets, rights and properties necessary for the lawful conduct of the
Immunomodulators business in a manner consistent with such activities as
heretofore conducted by Seller. All of the tangible assets, property and
equipment included in the Immunomodulator Assets are described in Schedule
2.1(a),
are in
good operating condition, reasonable wear and tear excepted, and are in
compliance with all applicable laws.
3.6. Litigation.
(i)
There is no pending or threatened Proceeding against Seller concerning or
relating to the Immunomodulator Assets or any of Seller’s Intellectual Property,
(ii) there is not pending against Seller, any judgment, order, writ, injunction,
or decree of any federal, state, local, or foreign Governmental Authority
concerning or relating to the Immunomodulator Assets, and (iii) Seller is not
in
default with respect to, nor has an event occurred that, with notice, lapse
of
time, or both, would be a default under, any judgment, order, writ, injunction,
or decree of any federal, state, local, or foreign court, or Governmental
Authority with respect to the Immunomodulator Assets.
6
3.7. Tax
Matters.
(a) Seller
has timely paid or will timely pay all Taxes due prior to the Closing, including
all Taxes shown as due on all Tax Returns and all estimated Tax payments due
on
or before the Closing Date and has filed all Tax Returns that it was required
to
file, and has paid all Taxes shown thereon as owing.
(b) None
of
Seller’s Tax Returns have been audited by the relevant taxing authorities. To
Seller’s Knowledge, no audit or examination, or claim or proposed assessment, by
any taxing authority is pending or threatened against Seller.
(c) Seller
has not waived any statute of limitations in respect of Taxes or agreed to
any
extension of time with respect to a Tax assessment or deficiency.
(d) Seller
is
not a party to any Tax allocation or sharing agreement.
3.8. Legal
Compliance.
Seller
has complied in all material respects with all applicable laws (including rules,
regulations, codes, injunctions, judgments, orders, decrees, and rulings
thereunder) of Governmental Authorities.
3.9. Brokers’
Fees.
Seller
has no liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this Agreement
for which Buyer could become liable or obligated.
3.10. Full
Disclosure.
None of
the representations and warranties made by Seller in this Agreement (including
the Schedules to this Agreement) contains any untrue statement of a material
fact, or omits to state a material fact necessary to prevent the statements
from
being misleading.
ARTICLE
4 BUYER’S
WARRANTIES
Buyer
represents and warrants to Seller, as follows as of the date hereof and as
of
the Closing Date:
4.1. Organization,
Standing and Qualification.
Buyer
is a corporation duly organized, existing, and in good standing under the laws
of Utah.
4.2. Authority
and Consents.
Buyer
has the corporate power and authority to execute and deliver this Agreement
and
the Ancillary Documents and to perform its obligations hereunder and thereunder.
The execution, delivery, and performance of this Agreement and the Ancillary
Documents by Buyer and the consummation of the transactions contemplated have
been duly authorized by all necessary corporate action on the part of
Buyer.
4.3. Binding
Obligation.
This
Agreement and the Ancillary Documents constitute valid and binding obligations
of Buyer, enforceable by Seller against Buyer in accordance with their
respective terms.
7
4.4. Noncontravention.
Neither
the execution and the delivery of each of this Agreement and the Ancillary
Documents, nor the consummation of the transactions contemplated hereby or
thereby will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of
any
Governmental Authority to which Buyer is subject or any provision of the charter
or bylaws of Buyer or (ii) conflict with, result in a breach of, constitute
a
default under, result in the acceleration of, create in any Person the right
to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Buyer is a party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Encumbrance upon any of its assets).
Buyer is not required to give any notice to, make any filing with, or obtain
any
authorization, consent, or approval of any Person in order to consummate the
transactions contemplated by this Agreement and the Ancillary
Documents.
4.5. Brokers’
Fees.
Buyer
has no liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this Agreement
for which Seller could become liable or obligated.
ARTICLE
5 OBLIGATIONS PRIOR TO CLOSING
5.1. Pre-Closing
Covenants.
The
Parties agree as follows with respect to the period between the execution of
this Agreement and the Closing.
5.2. General.
Each of
the Parties will use its reasonable best efforts to take all actions and to
do
all things necessary, proper, or advisable in order to consummate and make
effective the transactions contemplated by this Agreement and the Ancillary
Documents (including satisfaction, but not waiver, of the closing conditions
set
forth in Article 6 below).
5.3. Operation
of Business; Immunomodulator Assets.
Seller
will conduct its business in the Ordinary Course of Business and in compliance
in all material respects with all applicable laws and shall use commercially
reasonable efforts to preserve the goodwill associated with the Immunomodulators
business and maintain satisfactory relations with those having business
relationships with Seller. Seller shall not sell, lease or transfer any of
the
Immunomodulator Assets, subject any of the Immunomodulator Assets to any
Encumbrance or grant any rights to or under any of the Immunomodulator IP
Assets.
5.4. Notice
of Developments.
Each
Party will give prompt written notice to the other Party of any development
causing a breach of any of its own representations and warranties in Section
3
or Section 4 above, as the case may be. No disclosure by any Party pursuant
to
this Section 5.4, however, shall be deemed to amend or supplement any disclosure
schedule or to prevent or cure any misrepresentation or breach of
warranty.
ARTICLE
6 THE
CLOSING
6.1. Time
and Place.
The
sale and transfer of the Immunomodulator Assets by Seller to Buyer (the
“Closing”)
shall
take place at the offices of Buyer, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, on January 13, 2009 or such other date as the parties may mutually agree
(the “Closing
Date”);
provided, however, that the Closing Date shall be no later than January 13,
2009.
8
6.2. Conditions
to Obligation of Buyer.
The
obligation of Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(a) the
representations and warranties set forth in Section 3 above shall be true and
correct at and as of the Closing Date;
(b) Seller
shall have performed and complied with all of its covenants hereunder through
the Closing;
(c) there
shall not be any injunction, judgment, order, decree or ruling in effect
preventing consummation of any of the transactions contemplated by this
Agreement; nor shall there be any action taken, or any statute, rule, regulation
or order enacted, entered, enforced or deemed applicable to the transactions
contemplated hereby which makes the consummation of such transactions illegal
or
that has had, or is reasonably likely to have, a Seller Material Adverse
Effect;
(d) Seller
shall have delivered to Buyer a certificate to the effect that each of the
conditions specified above in Section 6.2(a) through (c) is satisfied in all
respects;
(e) Seller
shall have delivered or caused to be delivered to Buyer:
(i) the
▇▇▇▇
of Sale;
(ii) the
Consulting Agreement;
(iii) the
Invention Assignment and Non-Compete Agreement;
(iv) the
Registration Rights Agreement;
(v) the
Warrant; and
(vi) copies
of
written consents or minutes of meetings of the board of directors and the
shareholders of Seller, certified by an officer of Seller, authorizing and
approving Seller’s execution and delivery of, and the performance of its
obligations under, this Agreement and the Ancillary Documents, and the
transactions contemplated hereunder (including the sale of the Immunomodulator
Assets to Buyer under this Agreement);
(f) simultaneously
with the consummation of the transfer, Seller, through its officers, agents,
and
employees, shall put Buyer into full possession and enjoyment of all the
Immunomodulator Assets to be conveyed and transferred by this Agreement;
(g) all
actions to be taken by Seller in connection with consummation of the
transactions contemplated hereby and all certificates, instruments, and other
documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to Buyer; and
9
(h) Buyer
shall have completed its due diligence review within a period of sixty (60)
days
following the date of this Agreement and based upon its due diligence findings
at such time, has not delivered notice of termination pursuant to Section
7.1(c).
Buyer
may
waive any condition specified in this Section 6.2 if it executes a writing
so
stating at or prior to the Closing.
6.3. Conditions
to Obligation of Seller.
The
obligation of Seller to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(a) the
representations and warranties set forth in Section 4 above shall be true and
correct at and as of the Closing Date;
(b) Buyer
shall have performed and complied with all of its covenants hereunder through
the Closing;
(c) there
shall not be any injunction, judgment, order, decree or ruling in effect
preventing consummation of any of the transactions contemplated by this
Agreement; nor shall there be any action taken, or any statute, rule, regulation
or order enacted, entered, enforced or deemed applicable to the transactions
contemplated hereby which makes the consummation of such transactions illegal
or
that has had, or is reasonably likely to have, a Buyer Material Adverse
Effect;
(d) Buyer
shall have delivered to Seller a certificate to the effect that each of the
conditions specified above in Section 6.3(a) through (c) is satisfied in all
respects;
(e) Buyer
shall have delivered or caused to be delivered to Seller:
(i) the
▇▇▇▇
of Sale;
(ii) the
Consulting Agreement;
(iii) the
Invention Assignment and Non- Compete Agreement;
(iv) the
Registration Rights Agreement;
(v) the
Warrant; and
(f) all
actions to be taken by Buyer in connection with consummation of the transactions
contemplated hereby and all certificates, instruments, and other documents
required to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to Seller.
ARTICLE
7 TERMINATION
7.1. Termination
of Agreement.
This
Agreement may be terminated prior to the Closing as provided below:
10
(a) Buyer
and
Seller may terminate this Agreement by mutual written consent at any time prior
to the Closing;
(b) Buyer
may
terminate this Agreement by giving written notice to Seller at any time prior
to
the Closing (A) in the event Seller has breached any representation, warranty,
or covenant contained in this Agreement in any material respect, Buyer has
notified Seller of the breach, and the breach has continued without cure for
a
period of five days after the notice of breach or (B) if the Closing shall
not
have occurred on or before January 13, 2009, by reason of the failure of any
condition precedent under Section 6.2 hereof (unless the failure results
primarily from Buyer itself breaching any representation, warranty, or covenant
contained in this Agreement); and
(c) Buyer
may
terminate this Agreement at any time for any reason or no reason, at its sole
and absolute discretion, within sixty (60) days of the date of this Agreement
upon written notice to Seller. Each of the Parties hereby acknowledges that
it
is Buyer’s intention to conduct a due diligence inquiry with respect to the
Immunomodulator Assets and Buyer’s ownership of such Assets within sixty (60)
days of the date of this Agreement.
(d) Seller
may terminate this Agreement by giving written notice to Buyer at any time
prior
to the Closing (A) in the event Buyer has breached any representation, warranty,
or covenant contained in this Agreement in any material respect, Seller has
notified Buyer of the breach, and the breach has continued without cure for
a
period of five days after the notice of breach or (B) if the Closing shall
not
have occurred on or before Termination Date, by reason of the failure of any
condition precedent under Section 6.3 hereof (unless the failure results
primarily from Seller itself breaching any representation, warranty, or covenant
contained in this Agreement).
7.2. Effect
of Termination.
If
either Party terminates this Agreement pursuant to Section 7.1 above, this
Agreement shall immediately become void and have no effect and there shall
be no
liability or obligation on the part of Buyer, Seller or their respective
officers, directors, stockholders or Affiliates, except for any liability of
any
Party then in breach.
ARTICLE
8 OBLIGATIONS
AFTER CLOSING
8.1. Competition.
In
consideration for the payment by Buyer of the Purchase Price, to be made on
the
Closing, Seller will not, at any time within the three (3) year period
immediately following the Closing, directly or indirectly engage in, or have
any
interest in any Person (whether as an employee, officer, director, agent,
security holder, creditor, consultant, or otherwise) that engages in, any
activity worldwide that is the same as, similar to, or competitive with
Immunomodulators. Seller acknowledges that Buyer and its affiliates, successors
or assignees, may market and sell the Immunomodulator Assets and products
incorporating the Immunomodulator Assets worldwide and accordingly that is
a
reasonable territory for this restriction on competition.
11
8.2. Information
to be Held in Confidence.
From
and after the Closing, Seller and its respective officers, directors, and other
representatives will each hold in strict confidence all information of a
confidential nature and not generally known to the public with respect to the
Immunomodulator Assets, except when disclosure of such information is required
by law or legal process. If Seller believes that such disclosure is required,
it
will give Buyer advance notice of the disclosure and the basis for it, and
permit Buyer a reasonable opportunity to eliminate the need for or to narrow
such disclosure. In addition, Seller will not use to the detriment of Buyer
or
for the benefit of any other Person, or misuse in any way, any confidential
information or trade secrets related to or included in the Immunomodulator
Assets.
8.3. Further
Assurances.
Seller,
at any time on or after the Closing, will execute, acknowledge, and deliver
any
further deeds, assignments, conveyances, and other assurances, documents, and
instruments of transfer, reasonably requested by Buyer, and will take any other
action consistent with the terms of this Agreement that may reasonably be
requested by Buyer for the purpose of assigning, transferring, granting,
conveying, and confirming to Buyer, or reducing to possession, any or all
property (tangible and intangible) to be conveyed and transferred under this
Agreement. If requested by Buyer, Seller will prosecute or otherwise enforce
in
its own name for the benefit and under the direction of Buyer, any claims,
rights, or benefits that are transferred to Buyer under this Agreement and
that
require prosecution or enforcement in Seller’s name.
ARTICLE
9 NATURE
AND SURVIVAL OF REPRESENTATIONS
AND
OBLIGATIONS
9.1. Survival
of Representations and Warranties.
The
representations and warranties of the parties and any related causes of action
will survive the Closing until 5:00 p.m. New York time on the third anniversary
following the Closing, except (i) those representations and warranties made
by
Seller in Section 3.7 (Tax Matters), which representations and warranties and
any related causes of action shall survive the Closing until 5:00 p.m. New
York
time on the fifth anniversary following the Closing and (ii) those
representation and warranties made by Seller in Sections 3.3 (Intellectual
Property) and 3.5 (Title to Assets; Sufficiency of Assets), which
representations and warranties and any related causes of action shall survive
the Closing forever. All covenants and agreements set forth in this Agreement
and any Ancillary Document that are to be performed following the Closing Date
shall survive the Closing and continue in full force and effect until such
covenants and agreements are performed in accordance with the terms of this
Agreement and such Ancillary Document.
9.2. Indemnification
by Seller.
Seller
will indemnify and hold harmless Buyer, its affiliates, successors and assigns,
and their respective shareholders, directors, officers, employees, agents or
other Affiliates (“Buyer
Indemnitees”)
for
any loss, liability, claim, damage, expense, cost (including, without
limitation, costs of investigation and defense and reasonable fees and expenses
of counsel and other experts) or diminution of value, whether or not involving
a
third-party claim (collectively, “Damages”),
arising from or in connection with:
(a) any
breach of any representation or warranty made by Seller in this Agreement
(including the Schedules to this Agreement);
(b) any
breach of any covenant or obligation of Seller in this Agreement (including
the
Schedules to this Agreement); and
(c) the
Excluded Liabilities.
12
In
furtherance and not in limitation of the foregoing rights to indemnity and
in
addition to any remedies Buyer may have under this Agreement against Seller,
if
Buyer is entitled to any indemnification or other payment from Seller under
this
Agreement, Buyer may assign such right to any successor or assign.
9.3. Indemnification
by Buyer.
Buyer
will indemnify and hold harmless Seller and its shareholders, directors,
officers, employees, agents or other Affiliates (“Seller
Indemnitees”)
for
any Damages arising from or in connection with:
(a) any
breach of any representation or warranty made by Buyer in this Agreement;
and
(b) any
breach of any covenant or obligation of Buyer in this Agreement.
9.4. Notice
of
Claim.
(a) If
any
Person other than a Seller Indemnitee or a Buyer Indemnitee commences litigation
or asserts a demand (a “Third-Party
Claim”)
against a Party (“Claiming
Party”)
to the
Agreement, in respect of which the Claiming Party proposes to demand
indemnification hereunder, the Claiming Party shall provide written notice
to
the Party from whom indemnification is sought (the “Indemnitor”)
within
fifteen (15) days of the Claiming Party becoming aware of such Third-Party
Claim.
(b) If
the
Claiming Party should have a claim against the Indemnitor that is not a
Third-Party Claim, the Claiming Party shall deliver a written notice thereof
as
promptly as practicable to the Indemnitor specifying the nature and specific
basis for the claim and, to the extent then determinable, the amount or the
estimated amount of the claim.
(c) Notwithstanding
anything contained in this Section, the failure by the Claiming Party to timely
notify the Indemnitor of a Third-Party Claim does not relieve the Indemnitor
of
any indemnification responsibility under this Article 9 unless and only to
the
extent that such failure adversely prejudices the ability of the Indemnitor
to
defend such claim.
9.5. Procedure.
(a) Promptly
after receipt by the Indemnitor of written notice pursuant to Section 9.4 of
the
assertion or the commencement of any Third-Party Claim with respect to any
matter referred to in Sections 9.2 and 9.3 hereof, the Indemnitor shall be
entitled to assume the defense thereof, by giving written notice of its
intention to do so to the Indemnitee within twenty (20) days after receipt
of
the notice described in Section 9.4(a), with counsel reasonably satisfactory
to
the Indemnitee at the Indemnitor’s expense.
(b) If
the
Indemnitor shall assume the defense of such Third-Party Claim, it shall not
settle such Third-Party Claim unless such settlement (i) includes as an
unconditional term thereof the giving by the claimant or the plaintiff of a
release of the Indemnitee, reasonably satisfactory to the Indemnitee, from
all
liability with respect to such Third-Party Claim and (ii) does not impose
injunctive or other equitable relief on the Indemnitee. Notwithstanding the
assumption by the Indemnitor of the defense of any Third-Party Claim as provided
in this subsection, the Indemnitee shall be permitted to join in the defense
of
such Third-Party Claim and to employ counsel at its own expense. If requested
by
the Indemnitor, the Indemnitee shall cooperate, at the sole expense of the
Indemnitor, with the Indemnitor and its counsel in contesting the Third-Party
Claim or, if appropriate, in asserting any counterclaims or
cross-claims.
13
(c) If
the
Indemnitor shall fail to notify the Indemnitee of its desire to assume the
defense of any such Third-Party Claim within the prescribed period of time,
or
shall notify the Indemnitee that it will not assume the defense of any such
Third-Party Claim, then the Indemnitee may assume the defense of any such
Third-Party Claim at the Indemnitor’s expense, in which event it may do so in
such manner as it may reasonably deem appropriate. The Indemnitee shall not
settle any Third-Party Claim without the prior written consent of the
Indemnitor, which consent shall not be unreasonably withheld. The Indemnitor
shall be permitted to join in the defense of such Third-Party Claim and to
employ counsel at its own expense.
ARTICLE
10 COSTS
AND TAXES
10.1. Costs
and Taxes.
Each
Party will pay all costs and expenses, including its attorney fees and expenses,
incurred or to be incurred by it in negotiating and preparing this Agreement
and
in Closing and carrying out the transactions contemplated in this Agreement.
Seller shall pay all sales, use, stamp, transfer and like Taxes, if any,
required to be paid in connection with the sale of the Immunomodulator Assets
hereunder.
ARTICLE
11 MISCELLANEOUS
11.1. Effect
of Headings.
The
subject headings of the Sections and subsections of this Agreement are included
for convenience only and will not affect the construction or interpretation
of
any of its provisions.
11.2. Word
Usage.
Unless
the context clearly requires otherwise:
(a) plural
and singular numbers will each be considered to include the other;
(b) the
masculine, feminine, and neuter genders will each be considered to include
the
others;
(c) “will,”
“must,”
“agree,”
and
“covenants”
are
each mandatory;
(d) “may”
is
permissive;
(e) “or”
is
not
exclusive;
(f) “includes”
and
“including”
are
not
limiting;
(g) a
reference to any statute is a reference to that statute as amended to the date
of this Agreement; and
14
(h) a
reference to any document is to that document, as amended to the date of this
Agreement, including all exhibits and schedules, if any.
11.3. Entire
Agreement; Modification; Waiver.
This
Agreement constitutes the entire agreement between the Parties pertaining to
the
subject matter contained in it and supersedes all prior and contemporaneous
agreements, representations, and understandings of the Parties. No supplement,
modification, or amendment of this Agreement will be binding unless executed
in
writing by all the parties. No waiver of any of the provisions of this Agreement
will be considered, or will constitute, a waiver of any other provision, and
no
waiver will constitute a continuing waiver. No waiver will be binding unless
executed in writing by the Party making the waiver.
11.4. Counterparts;
Delivery.
This
Agreement may be executed in counterparts, each of which shall be deemed to
be
an original, and all of such counterparts taken together shall be deemed to
constitute one and the same instrument. Signature pages transmitted
electronically (e.g., by facsimile or in Portable Document Format (.pdf) as
an
attachment to an e-mail) shall have the full force and effect of original
signatures.
11.5. Press
Releases and Public Announcements.
No
Party shall issue any press release or make any public announcement relating
to
the subject matter of this Agreement prior to the Closing without the prior
written approval of the other Party; provided, however, that either Party may
make any public disclosure it believes in good faith is required by applicable
law or any listing or trading agreement concerning the publicly-traded
securities of any Affiliate (in which case the disclosing Party will use its
best efforts to advise the other Party prior to making the
disclosure).
11.6. Parties
In Interest.
Nothing
in this Agreement, whether express or implied, is intended to confer any rights
or remedies under, or by reason of, this Agreement on any Persons other than
the
parties to it and their respective successors and assigns (other than rights
granted to indemnified parties under Section 9); nothing in this Agreement
is
intended to relieve or discharge the obligation or liability of any third party
to any Party to this Agreement; and no provision will give any third party
any
right of subrogation or claim against any Party to this Agreement.
11.7. Assignment.
This
Agreement will be binding on, and will inure to the benefit of, the Parties
and
their respective heirs, legal representatives, successors, and assigns, provided
that Seller may not assign its obligations under this Agreement, and before
the
Closing, Buyer may not assign any of its rights under this
Agreement.
11.8. Notices.
All
notices, requests, consents and other communications under this Agreement shall
be in writing, shall be addressed to the receiving Party’s address set forth
below or to any other address a Party may designate by notice under this
Agreement, and shall be either (i) delivered by hand, (ii) sent by facsimile,
and mailed promptly by first class mail, (iii) sent by nationally recognized
overnight courier, or (iv) sent by certified mail, return receipt requested,
postage prepaid:
15
To
Seller
at: BBM
Holdings, Inc.
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CEO and President
Fax:
▇▇▇-▇▇▇-▇▇▇▇
To
Buyer
at: ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
[Address]
Fax:
_________
with
a
copy
to: ▇▇▇▇
& Hessen LLP
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax:
▇▇▇-▇▇▇-▇▇▇▇
All
notices, requests, consents and other communications under this Agreement shall
be deemed to have been given either (i) if by hand, at the time of the delivery
of the notice to the receiving Party, (ii) if by facsimile, at the time that
receipt of the facsimile has been acknowledged by electronic confirmation or
otherwise, or if no confirmation is received, on the fifth day following the
day
a hard copy of the transmission is mailed by first-class mail, (iii) if by
overnight courier, on the next Business Day following the day the notice is
delivered to the courier service, or (iv) if by certified mail, on the fifth
Business Day following the day of the mailing. Any Party may change the address
to which notices, requests, demands, claims, and other communications hereunder
are to be delivered by giving the other Party notice in the manner herein set
forth.
11.9. Governing
Law; Venue.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York without regard to principles of conflicts of law. Each party
hereby irrevocably consents and submits to the jurisdiction of any New York
or
United States Federal Court sitting in State of New York, County of New York,
over any action or proceeding arising out of or relating to this Agreement
and
irrevocably consents to the service of any and all process in any such action
or
proceeding by registered mail addressed to such party at its address specified
in Section 11.8 (or as otherwise noticed to the other party). Each party further
waives any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or
venue on the basis of forum
non conveniens.
Each
party also waives any right to trial by jury.
11.10. Severability.
If any
term or provision of this Agreement is or becomes invalid, illegal or
unenforceable in any situation in any jurisdiction, such provision shall be
fully severable and shall not affect the validity, legality or enforceability
of
the remaining terms and provisions hereof or the validity or enforceability
of
the offending term or provision in any other situation or in any other
jurisdiction. In such a case, the Parties will work together to draft provisions
which can replace the invalid or unenforceable provision with one that is valid
and enforceable and has an economic effect as similar as possible to that of
the
invalid or unenforceable provision.
16
11.11. Incorporation
of Exhibits and Schedules.
The
Exhibits and Schedules identified in this Agreement are incorporated herein
by
reference and made a part hereof.
11.12. Construction.
Seller
and Buyer acknowledge and agree that: (i) each Party and such Party’s counsel
has reviewed and negotiated, or has had the opportunity to review and negotiate,
the terms and provisions of this Agreement and have contributed to its review
and revision; (ii) any rule of construction to the effect that any ambiguities
are resolved against the drafting Party shall not be used to interpret this
Agreement; and (iii) the terms and provisions of this Agreement shall be
construed fairly as to Seller and Buyer and not in favor of or against either
Party, regardless of which Party was generally responsible for the preparation
of this Agreement.
11.13. Force
Majeure.
Neither
Party will be deemed to be in default or otherwise responsible for delays or
failures in performance resulting from acts of God; acts of war, terrorism
or
civil disturbance; governmental action or inaction; fires; earthquakes; or
other
causes beyond such Party’s reasonable control.
IN
WITNESS WHEREOF, the Parties to this Agreement have duly executed it on the
day
and year first above written.
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ |
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇, President and CEO
|
|
17